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FTC To Examine Microtransactions In Free-To-Play Games and Apps 125

Posted by Soulskill
from the view-the-rest-of-this-post-for-eight-cents dept.
A post at GamePolitics points out that the Federal Trade Commission will be looking into free-to-play mobile games that rely on internal microtransactions as a business model. Many such games are marketed for children, and there have been a spate of cases where kids racked up huge bills without their parents' knowledge or explicit consent. "The in-app purchases have also catapulted children's games such as Smurfs' Village and Tap Zoo, by San Francisco-based Pocket Gems, into the ranks of the highest-grossing apps on iPods, iPhones and iPads. But the practice is troubling parents and public interest groups, who say $99 for a wagon of Smurfberries or $19 for a bucket of snowflakes doesn't have any business in a children's game. Though a password is needed to make a purchase, critics say that the safeguards aren't strong enough and that there are loopholes. 'Parents need to know that the promotion of games and the delivery mechanism for them are deceptively cheap,' said Jim Styer, president of Common Sense Media, a public advocacy group for online content for children. 'But basically people are trying to make money off these apps, which is a huge problem, and only going to get bigger because mobile apps are the new platform for kids.'"
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FTC To Examine Microtransactions In Free-To-Play Games and Apps

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  • by the_raptor (652941) on Thursday February 24, 2011 @05:56AM (#35297980)

    $19, let alone $99, is not a bloody "micro-transaction". The original micro-transaction idea was talking about sub-dollar amounts (eg 5 cents to view a web page). Now days idiot games/web journalists apply the term to mean "online trading of money for in game goods and services".

  • by Richard_at_work (517087) <richardprice.gmail@com> on Thursday February 24, 2011 @06:17AM (#35298040)

    That said, apps that encourage kids to spend real money for shit like costumes etc. are treading on moral thin ice..

    How is this any different than the collectable card series that were highly prevelent throughout my childhood - football, baseball, TMNT, Battlestar Galactica, and then on to the collectable card games like Spellfire, Magic etc etc. Not to mention the crap that came along with the interest in Warhammer 40K (what a scam! I occassionally pop into my local store to see what they are doing, and the prices are even more ludicrous today!) and the various AD&D packs.

    Kids have been encouraged to buy tat for decades, this isn't new and it isn't any different than back in my youth.

    Besides, what kind of a parent links a credit card to a childs iTunes account? Where are these kids getting $99 to spend on crap?

  • by DrXym (126579) on Thursday February 24, 2011 @07:42AM (#35298320)

    How is this any different than the collectable card series that were highly prevelent throughout my childhood - football, baseball, TMNT, Battlestar Galactica, and then on to the collectable card games like Spellfire, Magic etc etc. Not to mention the crap that came along with the interest in Warhammer 40K (what a scam! I occassionally pop into my local store to see what they are doing, and the prices are even more ludicrous today!) and the various AD&D packs.

    Kids have been encouraged to buy tat for decades, this isn't new and it isn't any different than back in my youth.

    Besides, what kind of a parent links a credit card to a childs iTunes account? Where are these kids getting $99 to spend on crap?

    I think you know how it's different. Chances are that your parents directly supervised you when you bought your cards. Or if you were older and allowed to buy stuff by yourself you did so with an allowance. Either way there was direct control over how much you bought. And if you had raided their wallets to buy more they would almost certainly have noticed the missing money far more quickly. They might also notice the suspicious number of empty game wrappers & stacks of cards floating around the house. They might even have received a call from the local store or the school about the suspiciously about the number of cards you were purchasing. Aside from all that you as a kid bought your cards with hard cash, not smurfberries or some other ethereal point system designed to cause you to disassociate the worth of the item.

    The point is that all this human interaction and control needs to have as good a counterpart in the digital world. Parents need to be able to control kids spending and expect reasonable protections to be offered by the system. Responsible kid games and infrastructures should impose spending / credit hard limits as a failsafe and account holders should have tools to further limit spending and receive delivery notifications / reports of spending habits. All transactions should also be conducted in a real currency not "smurfberries" or whatever so the kid themselves has a handle on what they're spending.

    I realise that some games and stores may be close to that already. But given that we hear reports of abuses I don't think it would be wrong to issue code of conduct guidelines and possibly changes to the ratings system to ensure games abide by them.

  • Re:Price (Score:4, Insightful)

    by Teancum (67324) <robert_horning@n ... t ['etz' in gap]> on Thursday February 24, 2011 @09:01AM (#35298704) Homepage Journal

    If it is an on-line game that allows you to sign up via a common web browser and the kid somehow finds your credit card while you are sleeping, should you be required to honor those charges? Clearly your kid was "stealing your identity" when the contract was signed in a situation like that, but I say the problem is also that "on-line identity" is a difficult problem without some sort of biometric feedback.

    I consider "biometric" identity to be the only real proof, be that a signature scribbled by pen, a finger print, retinal scan, or DNA sample. The problem with "identity theft" is when "proof of identity" has not been properly established. Knowing the maiden name of somebody's mother is not "proof of identity", nor is knowledge of bank account numbers or government issued certificate numbers. If you can't really prove who really entered into the contract, it is a joke that the contract actually means something.

    I agree with your point, however, that you shouldn't open yourself up to potential dangers by setting up some system where a child can rack up charges on an unlimited basis, be that micro transactions in a game or text messages on a cell phone. For cell phones, I buy the pre-paid cell phones for my kids, and when they use up all of the minutes, I simply say "tough luck" as they have to wait until I can afford to put some more air-time on the phone. If I would permit my kids to play an on-line game, it would have to be in a similar situation where I would assign some trivial amount of money to an account and when it hit the limit, I would not feel obliged to be paying any more.

    BTW, I got into a similar tiff with a mail-order book publisher where my kid signed up for a "monthly subscription" when he purchased a book through his elementary school teacher (one of those semi-annoying fliers that teachers often send home with the kids from book publishers) and then a series of other things started to arrive at our home with his name on it. He purchased the book with his allowance money (it was about $10 or so) and filled out his name and stuff without even running it by me. After about six months, I got this annoying bill collector who got on my case demanding payment of about $100 for this extra stuff. I basically told the idiot "I'll see you in court if you care" as the contract was signed by a minor and that the merchandise was unsolicited mail. The guy on the phone said he would ruin my credit rating, and then I responded "How?". It never showed up on my credit report (I did check) and I never got a subpoena to appear in court. Essentially, the company took the loss and ignored me, as I've ignored them.

  • Re:Price (Score:3, Insightful)

    by Dunbal (464142) * on Thursday February 24, 2011 @09:13AM (#35298788)

    should you be required to honor those charges?

    You should a) not honor the charges and report your child to the authorities for credit card fraud/theft, be a witness against the child at the trial, etc or b) actually be the parent and discipline the child, and pay the damned bill.

  • Re:Price (Score:2, Insightful)

    by mehrotra.akash (1539473) on Thursday February 24, 2011 @09:37AM (#35298940)
    If your kid was to take a bunch of cash from home and spend it at the resturant/ movies,etc. do you have a right to ask for it back from the business owners?? Or would you discipline the child?
  • by Dachannien (617929) on Thursday February 24, 2011 @09:44AM (#35298998)

    How is this any different than the collectable card series that were highly prevelent throughout my childhood - football, baseball, TMNT, Battlestar Galactica, and then on to the collectable card games like Spellfire, Magic etc etc. Not to mention the crap that came along with the interest in Warhammer 40K (what a scam! I occassionally pop into my local store to see what they are doing, and the prices are even more ludicrous today!) and the various AD&D packs.

    Because when you were a kid, you had to bring actual physical cash to the comic book store to buy that stuff.

    The transactions the FTC is looking at don't even require a credit card (at least, not in the child's possession) - just touch some smurfberries on your iPhone and you've bought $100 of worthless virtual crap.

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