The games app business is growing at a quick pace, with the whole app business expected to be worth around €63bn within the next five years, according to the European Commission. Many games are designed and marketed specifically for young users. More than half of online games in the EU are advertised as “free”, but can carry hidden costs. Part of their turnover is generated by children buying extensions and extras while playing online games (so-called in-app or in-game purchases), while logged in on the parents’ smartphone or tablets, often through mechanisms that do not make it clear that real money is being spent by clicking on certain links.
As it emerges from the investigations conducted by the UK Office for Fair Trading, these games are often “freemium” apps, which base their business model on marketing free games and selling individual elements or extensions to it online. They frequently employ aggressive commercial practices exploiting children’s inexperience, vulnerability and credulity together with unclear pricing information. For instance, they could be telling players that the character they are playing with is going to be unhappy or otherwise suffer if they do not purchase additional elements (e.g. food or clothes for the character) in the app. Another example is addressing direct exhortations for purchases specifically to children, for instance by interrupting the game with options to purchase additional elements.
The concern and outrage of parents over purchases by children has led to a class action against Google in the US, resulting in a total of 32.5 mln $. The consumer protection authority in the UK has defined guidelines on admissible practices when distributing this kind of application and issue recommendations for industry. Finally, the European Commission has started investigations into in-app purchases and is currently conducting colloquia with industry representatives to develop guidelines for best practices that protect young consumers and their parents.