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ACCC investigates 'freemium' apps aimed at kids

The Australian Competition and Consumer Commission has announced that it is now investigating apps that aggressively promote in-app purchases to children.

Michelle Starr Science editor
Michelle Starr is CNET's science editor, and she hopes to get you as enthralled with the wonders of the universe as she is. When she's not daydreaming about flying through space, she's daydreaming about bats.
Michelle Starr
2 min read

The Australian Competition and Consumer Commission (ACCC) has announced that it is now investigating apps that aggressively promote in-app purchases to children.

(Credit: ACCAN)

After peak consumer body the Australian Communications Consumer Action Network (ACCAN) called the ACCC to action over in-app purchases (IAP) in May this year, the regulation body has announced that it will be investigating "freemium" apps that mislead children into spending money.

ACCAN found after months of looking into freemium apps that colourful, cartoonish games that will be particularly interesting to children often can't be played for long without spending money, using such tactics as delay timers and mandatory quests that require a special item to push users to spend money.

"We've known for some time that 'freemium' apps cause problems for consumers, especially children. The CNET Australia work on the My Little Pony app alerted us to an alarming trend where 'free' games don't just include but actually require in-app purchases," ACCAN policy and campaigns officer Erin Turner said in May. "When people download a game for free, they should be told if it will end up costing them money down the track. At the moment, this is not happening, and it needs to change."

Today, the ACCC has announced that it is joining an international effort to crack down on such apps, along with over 50 consumer protection agencies worldwide that are currently searching app stores.

"Consumers need to be aware that 'free' may not mean free," said ACCC deputy chair Delia Rickard. "Games and apps in the 'free' area of an online store may be free to download but attract costs for in-app purchases. Some of these apps are marketed for children, who do not connect the game they are playing with spending their parent's money in the real world."

In 2011, Apple introduced the option to require a password for all in-app purchases after children racked up thousands upon thousands of dollars in Capcom title Smurfs Village, but this option is not enabled by default. Android devices also have this option, sometimes enabled by default. The ACCC has provided detailed instructions for enabling this option on both operating systems here.

It is also important to note that obtaining a refund is possible. For iOS devices, all refunds come through Apple, which can be contacted via its support website. It gets a little trickier with Android. Refunds are entirely up to the individual developer, and the dodgier developers often don't list their contact information. If necessary, the ACCC advises that you contact your bank to reverse credit card charges.

If you or a child have ever mistakenly made an in-app purchase, you can report the app in question to the ACCC using its online form here.