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FTC looking into Apple's in-app purchasing policy

The FTC chairman is reportedly looking at how in-app purchases in kids' apps can cause parents to have to pay huge sums. The agency will review how Apple is marketing these apps.

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Erica Ogg Former Staff writer, CNET News
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.
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iPad and iPhone apps aimed at kids are now the subject of a review by the FT
iPad and iPhone apps aimed at kids are now the subject of a review by the FTC. James Martin/CNET

The Federal Trade Commission will review how Apple markets games with in-app purchases, but not for the reason you may think.

Apple introduced a controversial policyfor developers last week when it said that it would take a 30 percent cut of revenue generated from subscription publishing apps that included in-app purchases. Apple also said it would only accept apps whose subscription offers through its iOS app are consistent with the lowest price offered by the publisher elsewhere. The U.S. Department of Justice said last week it would take a look at Apple's policy, but stopped short of launching any kind of formal inquiry.

Today FTC Chairman John Leibowitz wrote a letter to Rep. Ed Markey (D-Mass.) saying he would review the way Apple is marketing in-app purchases, in particular apps aimed at children, according to The Washington Post.

Last week the Post reported on parents having to pay massive bills generated by their children making purchases within apps. Children are able to buy items within games that cost real money without fully understanding what they're doing, the report asserts.

In portions of the letter published by the Post, Leibowitz wrote to Markey, "We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases...Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications."

Apple did not immediately respond to a request for comment.