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Apple Sued Over In-App Purchases by Children

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Smurfs' Village on iTunes

Smurfs' Village on iTunes

Apple has been sued by a class of parents who claim the software giant is wrongfully profiting on in-app purchases within certain free applications — a process the complaint (PDF) calls a “bait and switch.”

The so-called “freemium” applications are available for download at no cost, but within them are opportunities to purchase — with real money — virtual currency and other items useful for playing the games, which are often geared toward children with names like “Tap Fish,” “Tap Zoo,” “Sundae Maker,” “Zombie Café,” and “The Smurfs’ Village.”

The parents claim that these “highly addictive, designed deliberately so” games are “inducing” their children to rack up charges on their parents’ credit cards, sometimes totaling in the hundreds of dollars; for instance, a wagon full of “Smurfberries” costs $99.99 and can be used to build up Smurf huts and more on The Smurfs’ Village.

While normally buying applications on the iPhone requires entering an iTunes password, in older versions of the operating system, there was a 15-minute window that allowed further purchases without re-entering a password. Complaints of this set-up led to an investigation by the FTC, which agreed “that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases.”

Apple does have an option that would prohibit in-app purchases via Parental Controls, and earlier this year the company also added a new requirement of re-entering a password for all in-app purchases. The free apps also have warnings in the first line in their descriptions in the iTunes store, such as this one for The Smurfs’ Village:

PLEASE NOTE: Smurf [sic] Village is free to play, but charges real money for additional in-app content. You may lock out the ability to purchase in-app content by adjusting your device’s settings.

These actions aren’t enough, though, according to the lawsuit, as the parents contend that Apple is “garnering millions of dollars of ill-gotten gains” by “targeting . . . children . . . and inducing them to purchase, without the knowledge or authorization of their parents,” Game Currency, which is “unlawful exploitation in the extreme.”

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April 21st, 2011 at 9:37 am

Posted in Class Actions,Consumer Protection

Tagged with