Europe’s ‘app economy’ is booming. It employs over one million people and is expected to be worth €63 billion in the next five years.
According to the external app analytics platform Distimo, around 80 per cent of the revenue – estimated at over €10 billion per year – of one supplier comes from purchases made by consumers from within an application through which consumers access special content or features, commonly called ‘in-app’ purchases.
However, according to the European Commission, for the app economy to develop its full potential and continue innovating, consumers need to trust the products.
At present over half of the EU online games’ market consists of games advertised as ‘free’, although they often entail sometimes costly in-app purchases. Often consumers are not fully aware that they are spending money because their credit cards get charged by default. Children are particularly vulnerable to marketing of ‘free to download’ games that are not ‘free to play’.
Following complaints from all over Europe, the European Commission met national enforcement authorities and large tech companies in order to discuss these concerns. Industry will be asked to commit to providing solutions within a clear time frame so as to ensure proper consumer protection for apps customers.
The four most important issues raised by consumers and discussed at the meetings were:
• Games advertised as ‘free’ should not mislead consumers about the true costs involved;
• Games should not contain direct exhortations to children to buy items in a game or to persuade an adult to buy items for them;
• Consumers should be adequately informed about the payment arrangements and purchases should not be debited through default settings without consumers’ explicit consent;
• Traders should provide an e-mail address so that consumers can contact them in case of queries or complaints.
At the meetings, national enforcement authorities across the EU presented their common understanding of how to apply the relevant consumer rules in this area. The action is led by the Danish Consumer Ombudsman.
France, the UK, Italy, Belgium, Luxembourg and Lithuania, members of the Consumer Protection Cooperation (CPC) network in charge of enforcing consumer rights across the EU, will be participating in the meetings as well.