FTC to Review Freemium Model For Social Games

Published on:

Congressman Edward J. Markey (D-Mass.), a senior member and
former chairman of the Energy and Commerce Committee’s Communications,
Technology and the Internet Subcommittee, sent a letter dated February 8, 2011 to the
Federal Trade Commission (FTC) requesting more information about
possible consumer protection issues related to “in-app” purchases, particularly relating to kids.
 
The following is excerpt from the letter:

I am disturbed by news
that in-app purchases may be taking advantage of children’s lack of
understanding when it comes to money and what it means to ‘buy’ an
imaginary game piece on the Web.  Companies shouldn’t be able to use
Smurfs and snowflakes and zoos as online ATMs pulling money from the
pockets of unsuspecting parents.  The use of mobile apps will continue
to escalate, which is why it is critical that more is done now to
examine these practices. I will continue to closely monitor this issue
and look forward to the FTC’s response
.”

Click here for a copy of the letter

It is important for companies to understand the potential legal issues with innovative business models and to ensure clarity so that consumers understand