Developers respond to FTC inquiry on in-app purchases

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Developers of childrens’ games for Apple’s iOS platform say that they’re taking steps to prevent accidental, costly in-app purchases, an issue that has earned the attention of the Federal Trade Commission as well as a U.S. congressman.

Capcom Mobile, whose Smurfs’ Village game has drawn media attention for the $1,400 of in-app purchases amassed by one 8-year-old girl, said in a written statement on Friday that it has already placed “clarifications and warnings” in the game’s description in the App Store, as well as added language in the game’s “Smurfberry store” aimed at “making it very clear that Smurfberries cost real money.”

Smurf's Village has drawn media attention because of one family's $1,400 bill for in-app purchases.
The changes were implemented in December, before this week’s news of the FTC inquiry, said Capcom spokesman Mike Larson in the written statement provided to Macworld. He said the company is prepared to “cooperate in full” with the investigation.

“Capcom has been in the videogame business for more than 25 years, so the last thing we want is to be misperceived as taking advantage of children,” Larson said. “We find consumer complaints of children inadvertently purchasing in-app content lamentable.”

Another developer, Recharge Studios—the maker of Dolphin Playannounced last week it was taking several steps to prevent inadvertent in-app purchases, including implementing a more transparent refund policy and lowering the price of in-game purchases.

“While this issue is emerging, and one we should be vigilant about, I don’t expect much will come of the FTC investigation beyond making the players in the ecosystem aware of the issues,” Hayden Creque, the company’s general counsel, told Macworld. “And that will make the ecosystem better.”

He added: “We are absolutely committed to continued to adjusting and meeting these problems. If we don’t, consumers aren’t going to do business with us.”

Capcom and Recharge Studios both said Apple bears some responsibility to build safeguards into iOS. Capcom’s Larson noted that a customer’s account remains logged in for 15 minutes after downloading an app or making an in-app purchase—making it possible to download further content without re-entering a password.

“This is not unique to our app; this is a function of iOS and we have no control over it,” Larson wrote, and added: “If parents think their child may have purchased in-app content by accident, we encourage them to request a refund from Apple.”

Pocket Gems, maker of the Tap Zoo game that has also come under scrutiny, echoed Larson's comment in its own written statement to Macworld. “This issue affects all apps with in-app purchases, not just ours,” Adrian Kaplan, the company's vice president for business operations, wrote. “If users are concerned about the potential for accidental in-app purchases, we recommend that they disable the feature on their device.”

In its statement on the matter, Recharge Studios suggested that one solution is that Apple require a fresh password entry for each in-app purchase.

Apple spokeswoman Trudy Muller declined to comment directly on the FTC inquiry. But she noted that parents can prevent many problems before their kids ever get ahold of the iPhone. “A password is required to purchase any good from the App Store, including using in-app purchases,” she said. ”Parents can use our parental control settings to restrict app-downloading and turn off in-app purchasing.”

The FTC, which has jurisdiction over unfair and deceptive commercial practices, declined to comment directly on the inquiry.

Recharge Studios’s Creque suggested the inquiry was a challenge to be expected when a new marketplace emerges from scratch, as the App Store has in recent years. “In any emerging marketplace and ecosystem, there will be issues," he said. “We want to make these profits in the right way.”

Updated at 1:13 p.m. PT with comment from Pocket Gems.

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At a Glance
  • Generic Company Place Holder Dolphin Play

  • Generic Company Place Holder Smurfs' Village

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