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Dangers of in-app purchases highlighted thanks to recent FTC lawsuit

by Zaid Kriel (Zaid)  Posted Monday, July 14, 2014 7:50:00 AM


Last week a number of tech and gaming sites reported that America's Federal Trade Commission (FTC) was instigating a lawsuit against online retailer, Amazon. The FTC's mandate is the elimination and prevention of anti-competitive practices by businesses; basically they're a consumer protection group. In fulfillment of that mission, the group's lawsuit alleges that Amazon makes it way too easy for children to make purchases when using mobile apps without the need to get their parent's consent.

The FTC said that Amazon's practices made it too easy for them to charge parents millions of dollars of via in-app purchases (also called microtransactions), payments that the parent likely would not have unauthorized. The consumer protector's purpose with the lawsuit is to get Amazon to pay refunds to affected families and also to have the court set a permanent ban on Amazon - and presumably other businesses - from charging for in-app purchases without explicit consent.

Because if you didn't know, in-app purchases? They kinda suck.Though the suckage can affect anyone that makes use of apps, gamers more so than any other group understand how detrimental they can be.


A Positive Spin

In-app purchases as a concept isn't a negative thing, in fact, it's actually a pretty smart idea that has both made some developers lots of money, while also giving many gamers a satisfying and fulfilling game experience. Case in point, DOTA 2. Arguably one of the biggest games currently available, DOTA 2 is 100% free. You can click on this link right now and download the game and play it without the experience costing you a cent. That sounds counter-intuitive, giving a game away for free. How do you turn a profit? 

What DOTA 2, and League of Legends, Path of Exile, Team Fortress, Blacklight: Retribution, et al, do is provide a compelling and complete gaming experience for the players. So how do they make money? Generally speaking, they charge gamers for the ability to cosmetically customise their player characters. The players enjoy the game so much, that they want to put a personal stamp on it and the publisher charges them for the right to do that. Game by game, the details may differ, but that is effectively what they do.

It's a system that's working really well. DOTA 2 is such a huge deal that they they have a global tournament for it's players with a prize pool of stretching into the double digit millions.

So the concept can work to the benefit of both developer and gamer, when implemented ethically. The problem of course is when its used unethically.

Careful, there are lots of sweary-type words in here. Probably not NSFW.

Gaming held hostage

Of course, those games all appear on the PC and generally speaking, most PC gamers tend to be fairly tech savvy and experienced enough to figure out when they're being taken for a ride. It's in the mobile area, with it's so-called free-to-play or freemium games, where in-app purchases start to grow warts. The most recent and best, or rather worst, example of this negativity in practice is EA's mobile version of Dungeon Keeper.

As NerdCubed's video above ably demonstrates, Dungeon Keeper is a game that holds it's gameplay hostage behind paywalls. The game is effectively unplayable without buying something. Games like this either infuriate by locking gameplay required features behind paywalls or frustrate by barring activity behind a timer; which can be sped up with a paycheck. The game is being held to ransom. 

Now for the inexperienced gamer - which is to say most mobile players and children - the line between what costs actual currency and what costs virtual currency is always blurred. It becomes more complicated when that in-game currency can be bought as well, because oftentimes you're not always clear what it is you're spending, adding a further layer of unnecessary complexity to what should be straight-forward experience. That's when we end up with situations where kids are burning through mom and pop's wallets buying literally nothing.

This is the third time I shown this video. Sad that it's still relevant.

A Defensive Game

If you're a regular visitor to GameZone, or any video game site worth its salt, then you probably know all this already. With that said, what's promising now is the fact that someone with real power and influence is taking notice and, more importantly, doing something about it. While the FTC's action here targets Amazon specifically, and doesn't address the freemium gameplay model specifically, what happens here should positively impact this deplorable practice doing forward. Assuming of course we get the desired result.

More over, it could possibly telegraph a future course of action for the FTC. The body has already engaged in a similar lawsuit with Apple, which saw that tech giant paying up $32.5 million. Should this action in defence of consumers prove successful, as that one did, how long before the FTC puts the moves on EA, Candy Crush Saga's King and Angry Birds' Rovio?

It is encouraging that the FTC is seeking to protect consumers from these types of unfair charges,  but it would be even more helpful if they'd take on the duplicity of in-app purchases as a retail practice generally. I'm not familiar with the length and breadth of the FTC's powers, so perhaps that's beyond the scope of their mandate. Either way, it's good to know that someone is looking out for the future of gaming, even if they don't know that they are.

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