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UPDATED 12:42 EST / FEBRUARY 23 2011

Apple, Google Under FTC’s Watch for In-App Purchases

The Federal Trade Commission is starting to proceed on investigating Apple for its in-app purchases and their charges. In order to have a fair view on the matter, the Federal Trade Commission will closely examine ‘the current industry practice with respect to the marketing and delivering of these types of applications,’ FTC Chairman Jon Leibowitz replied to Edward Markey, a Massachusetts Democrat. Leibowitz as well brought attention to a similar issue, more specifically, the accusations of Revert company’s deceptive endorsement of gaming apps in the iTunes store.

The whole argument started with an article from the Washington Post that discussed parents taken by surprise by their children’s large charges as the latter did not comprehend the difference between actual and pretend purchases such for Smurfberries on the Capcom Interactive game Smurfs’ Village. “What may appear in these games to be virtual coins and prizes to children result in very real costs to parents. I am pleased that the FTC has responded, and as the use of mobile apps continues to increase, I will continue to actively monitor developments in this important area,” Edward Markey said.

Hearing such news regarding Apple, we feel the onset of déjà vu, as last week we covered Apple’s rejection of Sony’s e-book app for the iPhone and Apple’s decision to introduce a new subscription plan for magazines, newspapers, video, music etc on the App Store, through which the company will not be denied anymore the 30 percent share for each existing or new subscriber to the app.

As a response to the current trends in digital publishing, Google launched Google One Pass, a payment system for publishers by which Google receives 10 percent of the shares, in comparison to Apple’s 30 percent.


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