Apple Inc (NASDAQ AAPL) has done little to tackle the problem of users being misled by “free” apps, said European Commission on Friday. The EU further pointed out that the tech giant has offered no “concrete and immediate” solutions even as children keep pushing up credit card bills by making “in-app” purchases on their smartphones and tablets.
The app industry generates about $13.3 billion in annual revenues in Europe. Most apps are free to download. But they tempt users, mostly kids and teens, to pay for in-game enhancements. Consumer groups in several European countries have raised concerns over misleading in-app purchases.
In February, the European Commission called in policymakers, industry members and consumer protection groups to discuss clear guidelines.
Apple Inc (NASDAQ AAPL): EU’s Wrath
EC said that Google Inc (NASDAQ GOOG) has done a good job of proposing a number of measures, which are currently being implemented. The search engine giant, which owns Android OS, has banned the use of “free” for any game that contains in-app purchases. Google has also changed default setting for in-app purchases to allow for active authorization every time. But the Commission said that Apple has made no commitment to tackle the issue of payment authorization.
The Commission said that regulators had the option to take legal action against firms that didn’t comply with EC’s guidance on free apps. Apple Inc (NASDAQ AAPL) said in a statement that it was doing “more than others” to resolve the issue. The company said it has added some great new features in the upcoming iOS 8 that will give parents more control over what their children can buy on the App Store.
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The app industry is booming in Europe. According to EC, it generates about $13.3 billion in annual revenues and employs about one million people in the region. Though Apple Inc (NASDAQ AAPL) hasn’t met regulators’ demand on payment authorization, the company has made the labeling on the iTunes clearer for apps marketed as “free” but also offer in-app purchases. Last year, Apple had to pay $32.5 million to parents in the U.S. as part of an agreement with the Federal Trade Commission.
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