Google, Apple, and Amazon under fire over freemium app sales model

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Italy’s Antitrust and Competition Authority launched an investigation that looks at the popular freemium app sales model currently in use in Google’s Play Store, Apple’s App Store, and Amazon’s Appstore.

The Wall Street Journal reports that the committee launched the investigation under the justification that customers could be misled by the “free” label. According to the regulator, anyone who downloads those apps believing that they are free, only for them to be unknowingly charged for items within the app. While all three app stores, as well as Gameloft, are on the hook, Google could face fines up to €5 million (~$6.9 million) if found to have mislead users.

The freemium app sales model, a common model found in use across all three app stores, involves offering your app for free. Within the app, users are then allowed to purchase features or items, such as in-game currency and items for your in-game character. Google has had trouble in the past with freemium apps, with a mother suing the company back in March, accusing the company for having the Play Store as a place where games and apps lure children into spending money.

This is not the first time the Italian antitrust committee fined a company for business practices considered damaging to consumers. Back in 2011, the committee fined Apple €900,000 ($1.2 million) for misleading customers into purchasing AppleCare, the company’s extended warranty plans, for products that were already covered. Apple also received another smaller fine before the company finally changed the way it marketed AppleCare.

Android Authority’s Jonathan Feist found that 147 out of the top 150 grossing apps in the Play Store are freemium apps. It’s unknown whether the investigation will solely focus on the freemium app sales model or whether the committee will also look into paid apps that offer in-app purchases. According to the committee, the investigation will likely be concluded before the end of the year.