Users and Developers Must Beware Unethical In-App Purchases

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The European Commission held hearings last week to make sure developers aren’t misleading consumers with in-app purchases. This raises the question, what’s the right way to handle in-app purchases and what’s the unethical way?

Google Play and Apple App StoreThe question isn’t an idle one — a study done last year by analytics company Distimo found that 98% of the revenue for the Google Play store came from in-app purchases, while they accounted for 92% of revenue in the Apple App Store. (This doesn’t include revenue generated by in-app advertising.)

Good vs. Bad

There’s no doubt tablet and smartphone users are much more likely to download free software than they are apps that they have to pay for up front. But most developers are looking to make money off their work — thus in-app purchases were created as a compromise.

Ethical developers put out a free app that’s useful or fun all on its own. Those who frequently use an app — or play a game — have the option of buying optional add-ons that make it better. These can add special tools to a utility or new weapons/vehicles/levels to a game.

Unethical developers release “free” software that’s virtually useless without multiple in-app purchases. Or they put out games that can’t be won unless the player buys certain items.

Good developers make it clear that the user is making an actual purchase and what it will cost, while bad developers seek to gloss over these facts, hoping to trick people into inadvertently spending their money.

The EU also opposes marketing in-app purchases specifically to children.

When Is Free Not Free?

One of the main questions being asked by the EU seems to be, can an app advertise itself as “Free” when it offers items for sale?

Probably the best answer for this is “yes, if the developer has followed proper ethical guidelines”. The apps designed to bilk people out of their money shouldn’t be on the market at all, so coming up for a description for them is moot.

Fair Warning

The unscrupulous practices described above are not uncommon, and they are things all tablet and smartphone users should be on the lookout for.

At this point, they are only unethical, but the EU hearings last week serve notice that they could soon become illegal as well. Developers who aren’t looking for legal problems need to be sure they are walking the straight and narrow.

AnalysisAnd if Apple and Google don’t want legislation interfering in the way they run their respective app stores, they need to make sure that bad companies aren’t using them to take advantage of consumers.

There’s a lot of money at stake — the Apple App Store alone handled $10 billion in revenue last year — and regulators aren’t going to stand idly by while people are being ripped off.



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