There has been a lot of fuzz around the ' freemium ' model and even the legality of it. In addition to the public debate over the issue, the market practices related to free to play ( F2P ) games and free apps with in-app purchases ( IAP ) have been reviewed, at least, by (i) the European Union and the national consumer protection authorities (for details please see the press release and the report ); (ii) the UK's Advertising Standards Authority ( ASA ) in the Dungeon Keeper case (please see the ASA decision ); (iii) the Italian competition authorities (please see the press release regarding the launch of the investigation); and the UK's Office of Fair Trading ( OFT ) in the OFT's principles for online and app based games . Even though these decisions and reports are not laws (lack the legally binding effect), they give some guidance on how the marketing and consumer protection laws should be applied or interpreted in the context of games and apps with IAP.
Much of the fuzz and public discussion around the freemium model has been understandably concentrated on the platform holders, like Apple and Google. They are, of course, the primary gate keepers here but it doesn't end there. It is going to be increasingly important for the developers to pay attention to the legal side of freemium and the platform holders are trying to push things into this direction as well. This can, for example, be seen from the above EU report where Google states that it will draw the attention of game developers world-wide, through the Google Developers Console, to the prohibition on exhortation to children to buy and as a last resort remove the breaching games from Google platforms and even ban the developer from offering apps on Google platforms in case of serious or repeated breaches. In the same report also Apple stated that the burden of compliance with national legal requirements rests with the developers.
What is it then that a developer could do to be in compliance with legislation when marketing and offering F2P games or apps with IAP? Based on the current understanding of things, at least, the following should be taken into account:
No more 'free to play' or 'free' in marketing
Developers should not use the word 'free' alone in any marketing material related to games or apps with IAP. In connection with the EU investigation Google has announced to remove the word 'free' from Google Play for games that are free to download but contain IAP. Also the above Dungeon Keeper decision by ASA (despite the controversies related to the decision) illustrates the ancient legal rule which prohibits the use of the word 'free' if there is in reality some cost involved with the product or service. This is not to say that there needs to be a legal disclaimer in every banner. The point is rather that it should be made clear that the game or app is not entirely free but contains IAP. Advertising can also be considered misleading if the game or app is advertised as free to download but some or many features or characters of the game included in the advertising is actually premium content and subject to charge.