FTC Investigating Apple, Google In-App Purchases

The Federal Trade Commission is looking "closely" at the issue of in-app purchases, particularly those that are not transparent about how they charge consumers for their activity.

"Let me assure you we will look closely at the current industry practice with respect to the marketing and delivering of these types of applications," FTC Chairman Jon Leibowitz wrote to Rep. Edward Markey, a Massachusetts Democrat, in a letter released Tuesday.

Earlier this month, Markey and Sen. Amy Klobuchar of Minnesota to the FTC asking the agency to examine in-app purchases from Google and Apple and whether or not consumers are being unfairly charged. They cited an article from the Washington Post that discussed parents who were shocked to find that their kids were racking up charges via in-app purchases.

"I am concerned about how these applications are being promoted and delivered to consumers with respect to children, who are unlikely to understand the ramifications of in-app purchases," Markey wrote at the time.

Markey asked if the FTC has taken any action regarding in-app purchases, and requested that the agency provide the public with information about how apps work.

In his February 15 response, Leibowitz said "we fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases."

The FTC, Leibowitz said, is working to ensure that the agency "has the tools necessary to respond to the growth of mobile commerce and conduct mobile-related investigations."

Leibowitz pointed to one of the FTC's recent cases, which accused marketing company in the iTunes store.

In December, Capcom Interactive, creator of the Farmville-inspired about unexpected in-app fees after one young girl purchased more than $1,000 in Smurfberries, the game's currency.