iPhone News Updated

Lawmakers urge FTC to probe iPhone in-app purchases

Lawmakers urge FTC to probe iPhone in-app purchases

Democratic lawmakers are petitioning the Federal Trade Commission to look into potentially deceptive practices connected to in-application purchases within children’s games optimized for Apple’s iOS platform. In letters to FTC chairman Jon Leibowitz, Rep. Edward J. Markey (Mass.) and Sens. Amy Klobuchar (Minn.) and Mark Pryor (Ark.) are urging the consumer watchdog to investigate the in-app transaction model after The Washington Post reported multiple parent complaints tied to virtual goods sales within free iPhone, iPod touch and iPad game downloads. One child playing the Smurfs Village game spent a reported $1,400 acquiring batches of Smurfberries priced at $99 each.

Although iOS in-app transactions cannot be conducted without a password, parents and public interest groups maintain Apple’s safeguards must be made stronger. “Companies shouldn’t be able to use smurfs and snowflakes and zoos as online ATMs, pulling money from the pockets of unsuspecting parents,” Markey writes. “The use of mobile apps will continue to escalate, which is why it is critical that more is done now to examine these practices.” Markey adds that the in-app purchase model may be deceptive, explaining that when parents download titles geared for their children, they do not anticipate the application will include virtual items available for sale.

The FTC confirmed it received the letters, but the organization declined to comment. In addition, Apple was mailed a copy of Markey’s letter, but the computing giant also declined to comment.

App store analytics firm Distimo reports that between June 2010 and December 2010, revenues generated by in-app purchases in free applications more than doubled across both the iPhone and iPad. In-app transactions across free and premium apps now account for 49 percent of iPhone developer revenues and 29 percent of iPad developer income.

[Thanks: http://www.fiercemobilecontent.com]

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