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FTC Will Look Into Marketing of 'Free Apps'

Federal Trade Commission chairman Jon Leibowitz says the agency will look into the marketing and delivery of apps that are not as free as they may appear.

That came in a letter to Rep. Ed Markey (D-Mass.), who had asked the chairman to look into the apps "to determine whether they constitute unfair or deceptive acts of practices."

"We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases," said Leibowitz. "Let me assure we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications."

The FTC has limited rulemaking authority, but it is empowered to protect against unfair acts and practices. He said protecting consumers in the mobile space is one of the current "challenges" of the commission, but one he said staffers were being given the "tools necessary to respond," though he did not elaborate.

In a Feb. 8 letter to Leibowitz, Markey had asked the FTC about the consumer protection implications of reports that Google and Apple were offering free apps for games that included in-app purchases. He cited a Washington Post article about one free game downloaded game for which a child purchased $1,000 worth of virtual game accessories without realizing it.

"I am concerned about how these applications are being promoted and delivered to consumers," Markey wrote in that letter," particularly children, who are unlikely to understand the ramification of in-app purchases."

He suggested the FTC might want to find ways to provide consumers with more information about the marketing of such apps. "I Request that the commission assess current industry activities in this area," he had said.

Markey has pointed out that the escalation of mobile apps will only increase. The White House, for example, wants 98% of the country to have access to 4G mobile wireless services within five years.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.