Australian government to investigate in-app purchases, vows to “name and shame” rip-offs

The Australian government is to conduct an investigation into the pricing of mobile apps, including warnings around in-app purchases, safeguards for children and opt-out features, according to an announcement from the Commonwealth Consumer Affairs Advisory Council (CCAAC).

The report from the organization — an expert panel that provides consumer policy advice to the Assistant Treasurer — follows a series of complaints and will look at in-app purchases across a range of digital content and apps, including music, movies, magazines, software and games. The system of buying content from inside apps forms the basis of horror stories worldwide that involve unsuspecting consumers, or parents of children, that rack up expensive bills after being unaware that free apps are not always what they seem.

“This inquiry is an opportunity to look at the adequacy of existing measures to address any consumer concern, including the legal protections available to consumers and the efforts of industry to improve the way they do business with their customers,” David Bradbury, the Assistant Treasurer, said in a statement.

“Apps are…increasingly relying on ‘in-app’ purchases and subscriptions, particularly common in games that may be played by children. Some of these apps are causing consumers great frustration and cost, and this inquiry will help to name and shame some of the worst offenders,” Bradbury continued, before asking Australians to do their bit and contribute their own horror stories.

The first step towards an inquiry came today when Bradbury released the terms of reference for the investigation, as below. A public consultation process will open soon so we’ll know more then.

Terms of reference

Under its terms of reference, CCAAC will examine the following matters as part of its inquiry:

• The characteristics, features and trends of app markets in Australia;
• Consumer experiences when downloading and using such content, including when used by children;
• Adequacy of the information being disclosed to consumers about the costs associated when downloading and using this content before and after it is downloaded;
• Adequacy of existing measures to address any consumer concern, including the legal protections available to consumers, the adequacy of default settings to ensure consumers are making an active decision before incurring additional charges, the availability and ease of use of ‘opt out’ features, the adequacy of existing parental controls for app stores and how these controls are promoted to consumers, and any other industry initiatives;
• Actions that can be taken by consumers, industry and governments to help improve consumer experiences when making in-app purchases, including international approaches.

Australia’s government has been particularly active around technology-related subjects and, earlier this year, the House of Representatives put the wheels in motion for an investigation into the price of downloads in the country. A previous report from the Productivity Commission found that reasons commonly put forward for dual pricing are “not persuasive” and, in the case of downloads for music and other software, are “practically zero and uniform around the world”.

That report, which is separate to today’s announcement, saw a range of tech firms asked to explain dual pricing to parliament.

Apple co-founder Steve Wozniak called the dual pricing in Australia “horrible”, before going on to voice his opinion that such practices should be outlawed.

Image via Flickr / PhotoAtelier (Glen)