A few years ago, tech companies were confronted with a common complaint from parents: their children were inadvertently spending lots of money on in-app purchases while using children’s apps. Although this led to the implementation of expanded parental control settings, children’s app developers stayed the course. Last month, however, three senators asked the FTC to investigate the use of potentially manipulative marketing practices in apps designed for children. In a joint letter to the Commissioners, Senators Edward J. Markey (D-Mass.), Tom Udall (D-N.M.), and Richard Blumenthal (D-Conn.) cited a recent study published in the Journal of Developmental & Behavioral Pediatrics (the “Study”) that describes various advertising techniques children’s apps use that the Senators believe constitute unfair and deceptive practices under Section 5 of the FTC Act.
The heart of the Senators’ concerns is that children are too young to assess and identify marketing when it appears under the guise of gameplay. The Senators describe four general categories of apps with which they take issue: (1) apps marketed as “free” when they actually require additional spending in order to play; (2) apps that guide users’ attention to various ads throughout gameplay; (3) apps whose characters overtly encourage users to make in-app purchases; and (4) apps labeled as educational, but that are nonetheless inundated with advertisements, detracting from any educational value the app may have. According to the Study, over 95% of the 135 apps the authors analyzed included advertising in some form. The Senators hope an FTC investigation can help protect children and families from these purported deceptive and unfair marketing techniques.
What does this mean for app developers and brands with children’s apps? With the potential for increased FTC scrutiny, developers and brands alike would do well to clarify the line between an app and advertising material within the app. Furthermore, ensure that the app is appropriately labelled and categorized wherever it is sold, and include helpful additional language in the app’s description. Lastly, ensure the app complies and is compatible with parental settings, so that parents can better monitor their children’s app usage and make more informed decisions about whether to allow continued use of an app. Although the FTC has yet to respond to the Senators’ letter, we’ll be sure to track any developments in this space.