Claiming that so-called “freemium” mobile apps mislead consumers, Italy’s competition regulator is taking aim at Google, Apple, Amazon and French game developer Gameloft. According to the Wall Street Journal, Italian authorities have begun to investigate the companies and the issue.
Previously, the EU argued that freemium apps are potentially deceptive because they’re initially free to download but generate revenues within the app, possibly without full awareness of users. The EU, and now the Italian authorities, worry that consumers may not know they’re being charged for items within apps, such as virtual goods within games.
If the named companies are found to be deceptive in their practices, Italian regulators would be permitted to slap a €5 million fine on each. However, they would also probably seek more disclosures and other changes in business practices to alert consumers to the fact that they may get charged for items within apps.
According to an extensive international survey conducted jointly by App Annie and IDC, the freemium model is now the most popular way to monetize apps globally. The study also found that only about 20 percent of freemium app users were making in-app purchases.
That “20 percent” survey finding suggests that people may not be as readily deceived by the freemium model as the Italian regulators fear.