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ACCC to investigate apps that prey on children

  • Smurfs Village cited in particular
  • In-app purchases can be misleading
  • Children and teenagers allegedly targeted
Written by Adam Wajnberg
13/03/2012

The Australian Competition and Consumer Commission (ACCC), a government watchdog on fair trading, has released a statement that it will begin cracking down on false or misleading advertising in the mobile application sphere, targeting apps that are free but draw children and young people into spending vast sums of money on upgrades and in-app purchases.

smurfs village in app purchase

Following a recent effort to further crack down on 19- number premium mobile services that sign children and teenagers unwittingly up to pricey subscription services, the ACCC has released a paper detailing how apps like Smurf’s Village have adopted similar practices to rack up massive profits on the back of impressionable youngsters.

Apple, the publisher of the iOS operating system (present on the market leading iPod, iPhone and iPad lines) introduced in-app purchases over a year ago, and other platforms have followed suit. Part of the reason for the introduction of this service was to boost developer profits in the face of piracy. Another factor was the low barrier to entry for quality apps – some of the best apps are completely free, while very few are sold for more than $5. Even on a platform with over 100 million devices and growing, that type of slow return can crush a development company in its early stages. The introduction of in-app purchases allowed for the growth of ‘freemium’ content – quality free content that can entice users towards spending money.

But some developers have used the phenomenon to instead draw in young users to free games that are almost unplayable without spending an ever-rising amount of cash. The average user for these types of popular games can spend between $20 and $30 a month, though some parents have been shocked to find credit card bills for hundreds of dollars.

Other apps, however, have found a good middle ground between revenue raising and gameplay. Infinity Blade, a richly textured sword and sorcery game, allows users to purchase new swords, helmets, magic rings and shields to battle against an ever-escalating roster of monsters. Users have the option of purchasing gold for real-world money, but all of the items can be obtained with regular (albeit copious) hours of gameplay. But true to the ACCC’s concerns, even these games are aimed at older audiences who can make those decisions independently.

Smurfs Village is available on iOS, Android and BlackBerry operating systems, with a Windows Phone release expected soon. The game now carries warnings that real money will be spent when purchasing smurfberries.

smurfs village in app purchase warning

The ACCC document regarding this issue can be accessed here: Children and young people as vulnerable consumers – the ACCC’s role

Apple’s iPhone 4S is available from as low as $13/month on Virgin’s Fair Go $39 Plan. Call Virgin on 1300 302 649 for more details.

Samsung’s Galaxy S2 is the top-selling Android phone in Australia, and is now available for free on Dodo’s $29.90 Mobile Mega Cap. Call Dodo on 1300 301 550 for more details.

The BlackBerry Torch 9860 is BlackBerry’s premiere multimedia smartphone, and is now available for free on Optus’ $29 Cap Plan. Call Optus on 1300 302 412 for more info
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