A representative from Massachusetts asked a federal agency to investigate the AppStore for misleading children into buying virtual items with real money, and the FTC agreed to review the situation.

In the great Smurfberry Kerfuffle of 2011, an 8-year-old girl unwittingly purchased $1400 worth of digital goods while playing the Smurf Village app on her parent’s iPad. Although the money was refunded by Apple, the point stands that a child was easily led to make the purchase, and that there isn’t enough of a distinction made in such freemium games between transactions that cost real money and those that use fictional currency. In response, Rep. Edward Markey, a Democrat from Massachusetts, wrote a letter suggesting that the Federal Trade Commission look into these kinds of applications. The FTC Chairman, Jon Leibowitz, responded today that he was indeed looking into the Smurfberry problem.

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

Rep. Markey was quick to link his name once again to the issue by responding with a statement of his own. “What may appear in these games to be virtual coins and prizes to children result in very real costs to parents,” said Markey. “I am pleased that the FTC has responded, and as the use of mobile apps continues to increase, I will continue to actively monitor developments in this important area.”

The FTC will probably take a while to look into the allegations, but expect to see some kind of policy for freemium or free-to-play Apps in the future. The ramifications for this development are far-reaching for the videogame industry as free-to-play and freemium games are quickly taking over the market, not only with casual games on social networking sites but also so-called hardcore MMOs like LOTRO and Champions Online.

All of these games are now at risk to be regulated by the FTC based on what the commission finds in its review.

Source: Washington Post

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