EU Regulators Call for In-App Purchase Reform

Regulators from the European Commission are calling for app store makers to stop identifying mobile apps that provide (or in some cases actually require) in-app purchases as free. And it has called out Apple, in particular, for not doing enough to protect consumers from inadvertent purchases. Google, meanwhile, has already agreed to major reforms for its own app store.

"In-app purchases are a legitimate business model, but it's essential for app-makers to understand and respect EU law while they develop these new business models," EU Vice President Neelie Kroes said in a statement. "This is significant for consumers," EU Commissioner for Consumer Policy Neven Mimica added. "In particular, children must be better protected when playing online."

According to the EC, it approached Apple, Google and the Interactive Software Federation of Europe in late 2013 and asked them to voluntarily enact in-app purchase reform in order to meet EU consumer protection laws. Among the guidelines were that "free" apps should not be allowed to mislead consumers about the true costs, games aimed explicitly at children should not be allowed to advertise in-app purchases or direct them to persuade an adult to OK such purchases, and that apps not be allowed to debit consumer accounts with explicit consent.

Months later, only Google had responded in a manner that the EC found appropriate. It agreed to no longer use the word "free" in tandem with apps and games that contain in-app purchases. It will develop app maker guidelines that meet EU requirements for protecting children and consumers. And it will change the default settings so that in-app purchases require consumer permission every time, by default. These changes will be implemented by September 2014, Google says.

Apple, not so much.

"Regrettably, no concrete and immediate solutions have been made by Apple to date to address the concerns linked in particular to payment authorization," the EU statement chides. "Apple has proposed to address those concerns, [but] no firm commitment and no timing have been provided for the implementation of such possible future changes.

Apple defended itself as it usually does, by explaining that it has done nothing wrong and doesn't need to change anything just because some pesky regulatory body thinks it should.

"These controls go far beyond the features of others in the industry," an Apple statement notes. "But we are always working to strengthen the protections we have in place, and we're adding great new features with iOS 8, such as Ask to Buy, giving parents even more control over what their kids can buy on the App Store. Our goal is to continue to provide the best experience for our customers and we will continue to work with the EC member states to respond to their concerns."

It is perhaps even more notable that Microsoft isn't even part of this conversation.

And this isn't the first time. When the EC required Google recently to respect a "right to privacy" requirement in its search results, Microsoft soon thereafter proactively agreed to do the same for its Bing search engine. But in doing so, it really only highlighted how inconsequential Bing is in that region. I would imagine that the software giant will soon agree to change how in-app purchases are handled in Windows 8.x and Windows Phone, as well, though again no one has asked them to. And that's because Google's and Apple's platforms combined own about 95 percent of the market for mobile apps.