Google Play Store under fire for freemium app model, could face €5 million in fines in Italy

by: Jonathan FeistMay 17, 2014

Google Play Store freemium investigation law court italy

The Antitrust and Competition Authority in Italy has launched an investigation into the increasingly common “freemium” app model, stating that customers could be misled by the label “free,” only to be charged unknown amounts for items within the app.

The freemium app model has become very common for many developers across multiple app markets, including the Google Play Store, Apple’s App Store and Amazon’s app store. It is a very simple model, offer your app for free, then allow the user to purchase from within the app additional features or in-app items, such as an in-game currency or additional levels, music, books, comics and more.

9 to 5 Google is reporting that the antitrust committee will look to determine if users who download these apps for free believe that they are completely free, not knowing when downloading the app how much it will actually cost. A number of app stores are on the hook here, but it is reported that Google could be fined as much as €5 million if found to have misled customers.

Google recently made adjustments to their Play Store developers policies. The changes include a new prominent statement if an app offers in-app purchases and requires developers to outline if in-app purchases are available to users. Following these guidelines, as an example, Disney has gone ahead and added info to the description of the game Frozen Free Fall that addresses the above concerns.

Frozen Free Fall freemium Play Store Header

Before you download this experience, please consider that this app contains social media links to connect with others, in-app purchases that cost real money, push notifications to let you know when we have exciting updates like new content, as well as advertising for The Walt Disney Family of Companies and some third parties. In App Purchases from $0.99-2.99

Should Google’s newest implementations be found lacking, many app developers could be affected. I performed a quick count this evening and found that 147 of the 150 top grossing apps in the Google Play Store utilize the freemium model. It is unknown at this time if the Italian committee will target the app markets based solely on freemium apps, or if paid apps that also offer in-app payments will be under the microscope as well. Either way, the Italian regulator plans to conclude their investigation by the end of the year.

Do you find the freemium app model confusing in any way – specifically, have you ever been confused by a ‘free’ app into making a not-so-free in-app purchase? That was an unfair and leading question, so I’ll ask instead, do you approve of the freemium app model, or would you prefer to just pay up front for an app to gain access to all of its items and functionality?

  • MasterMuffin

    I can’t understand how Google Play, App Store etc. can be sued for this. Even if app’s icon said freemium, the install button just said freemium and the description said “this is freemium app so it contains IAPs”, many people wouldn’t read it and just download. Many don’t even know what freemium is!

    • Preben Nielsen

      Whether or not others would read such “warnings” I would like them. I hate installing apps that unexpectedly contain in-app purchases – especially since there are apps out there, when you pay up-front but ALSO have in-app purchase.

      • MasterMuffin

        But why isn’t the current thing in the Frozen picture enough?

        • amnesia

          Because people are stupid.

    • Plinky

      Yeah that’s pretty stupid imo, since on PC we have free 2 play games (with in game purchases) for years. Way be before Apple and Google started creating apps.

  • ahmad dalloul

    i would like to just pay up front for an app

    • JosephHindy

      You are one of a few. There have been paid apps in the Play Store for years…people never bought em…and ad block destroys the ad model.

      This is the only way developers have made any real money in the play store ever. If people want IAPs to disappear they have to start showing that devs can make money the other ways.

  • fatspirit

    It’s pretty clear, that pay once model is better for users and freemium is better for developers.

  • LiiIiikEaBau5

    ….and all those money will go to Italian government, not users. Mafia nation!

  • Nagasaky2x

    As always they sue the companies because the users don’t read. It’s pretty obvious, even when you click for the in-app purchase it shows your credit card data and what you will be charged.

  • hoggleboggle

    Nobody is getting sued. They are being investigated by a regulatory body who are looking into whether the app stores have misled the users.

  • Rohin Nair

    I’m sorry, but are Italians illiterate or something ? How can they not understand the terms “in app purchases” which is included below the app ?

    • Bradley Uffner

      That notice was only added in an update that happened AFTER the investigation began.

      • Rohin Nair

        No, im talking about the one in the bottom right below the screenshots of the app, above the size of the app

  • Colleen Osbaldo

    This is not fair for the customers, infact it would negatively affect the brand name.

  • cellabonez

    wow wonder what else is new, oh yes placing a warning message before adding your credit card to account.” warning :adding card information may lead to stupidity with making in app purchases”.

  • CRiTiCaL_FLuX

    Definitely pay upfront for everything. The problem was before developers were forced to specify whether in-app purchases were present, you would buy an app only to realize after that you still had to pay more to access all the content.

  • Albin

    Personally I just want clarity about what functionality is in the “free” install versus what can or must be purchased. I actually prefer a single installation, having a couple of times tested a free app then lost my personal settings / configuration when installing the separate purchased version. More and more I want to see internet-dependent apps with their continual nuisance updates and reinstalls just disappear, and be replaced with mobile-optimized web sites accessed through a better designed browser. A lot of apps are nothing but locally installed web pages.

  • Roberto Tomás

    I think it would be enough to label the app as in the image above, and additionally allow users to sort and filter based on that tag in any future advanced search feature .. so that you could for example search for truly free games vs not, freemium games, or pay-in-advance games.

  • Terrence Amir McKelvey

    I’m sorry but anyone who thinks this is wrong is a complete moron. Pay for apps, Free to Play games, it’s all the same basically. If you want to pay for something there is plenty notice THAT YOU ARE PAYING FOR IT. You are really a moron if you want to sue because suddenly in a free app there is something EXTRA that you can purchase.

  • Adam Outler

    I downloaded a free app the other day not knowing that there were in app purchases. I got addicted and ended up having to spend $10. Had in-app purchases been mentioned upfront I would not have tried it.

  • jbernardo

    For me the “in app purchases” warning is usually enough to make me avoid the app. I prefer paying for the full version rather than having to buy indispensable functionality inside the app ending up with a much bigger bill. IAP is for suckers, it uses the drug dealer approach.

  • Kraynyan

    Why only apps in app stores? Why not go for all of those “pay-to-win” games that exist everywhere else?

  • DirtyFred

    Pay model sucks.If you don’t like an app which is freemium you can still uninstall it without spending real money.So i prefer freemium.