By Eric Sylvers
MILAN-- Apple Inc., Google Inc. and Amazon.com Inc. have reached
an accord that allows the U.S. companies to avoid fines for
allegedly misleading people in the European Union to make purchases
in mobile phone apps that are initially free to download.
The three companies, which run stores to download apps, and
Gameloft, a French game developer, committed to make changes
including removing the words "free" from the apps that could
require payments once a person has started using them, Italy's
Antitrust and Competition Authority said on Friday. The companies
also agreed to make it clearer within the apps when people are
about to make a purchase.
The investigation began last May following a complaint from an
Italian consumer association and came after the EU had called on
companies to change the "freemium" model in which apps are free to
download, but then can later require payments that sometimes get
automatically charged to credit cards.
"Consumers can now count on stronger guarantees than what would
have been achieved by sanctioning the companies involved," said the
Italian regulator, which carried out the investigation in
conjunction with the EU Commission.
The companies, which have 60 days to implement the changes they
agreed to make, had faced a maximum fine of EUR5 million ($5.65
million) each.
The freemium model, which can include payments to access new
levels or acquire a virtual object that makes a player more
powerful, accounts for more than half of the EU online games
market.
The EU has forecast that the bloc's "app economy" will produce
EUR63 billion in revenue in 2018, more than triple the 2013 figure,
and that the long-term health of the industry could be threatened
by consumer confusion with the freemium model.
"The apps market is good for Europe and consumer satisfaction is
high," said a Google spokesman. "It is still a relatively new
market--new for consumers, new for developers, and new for us too
-- and we will keep iterating to ensure our users enjoy the best
experience possible."
Amazon declined to comment. Apple and Gameloft couldn't
immediately be reached for comment.
Write to Eric Sylvers at eric.sylvers@wsj.com
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