For years Apple has been grappling with unhappy parents whose kids ran up huge tabs by buying virtual goods available through ostensibly free smartphone apps. The company faced a class-action lawsuit, as well as an investigation by the Federal Trade Commission, which said it had received “at least tens of thousands” of complaints.
Apple has been working to confront the issue, agreeing in January to pay $32.5 million in refunds and establish technological barriers to keep kids from spending. But the company that runs the main competing app marketplace, Google, has been strangely slow on the draw. Two days after Apple reached its deal with the FTC, Consumer Reports ran a blog post pointing out that it’s open season on Google apps.
A class-action lawsuit was filed on Friday against Google in the name of Ilana Imber-Gluck, a mother of two with a Samsung (005930:KS) smartphone whose kid ran up about $66 in charges for a game called Run Jump Smash. The amount seems pretty modest, compared to a few cases of iPhone spending sprees that extended into thousands of dollars.
The root issue with both Google and Apple is that when parents who download apps are unwittingly giving permission for children to make additional purchases within the game without re-entering a password—at least for a short period of time. Apple requires passwords to be reentered after 15 minutes; Google allows a half-hour. Apple has promised to fix the opening by the end of the month.
It’s curious that Google didn’t take advantage of its competitor’s plight to patch its own system before ending up in court. The company hasn’t responded to a request for comment. An FTC spokesperson said the agency couldn’t comment on Google’s policies on in-app purchases.
For companies such as Apple and Google, the trade-off here seems simple: Sacrifice a small amount of convenience for security. But even a little friction standing in the way of a purchase grates on Silicon Valley. People may find it irritating to have to re-enter their passwords every time they make a purchase, which could lead to fewer virtual goods sold. Such cases are bound to provoke parental eye-rolling, given that parents are merely demanding technical measures that would allow them to ignore children, once they’ve handed over their phones.
At worse, the app stores are enabling clever developers. There’s increasing criticism of the use of in-app purchases, which is becoming the dominant business model for smartphone games. It’s not just about children. Game developers grumble that so-called free-to-play games are devolving into tricks to get people to spend money. Debate continues as to whether these games are ethical, even if your targets are weak-willed adults.