The US Federal Trade Commission is to review in-app purchasing and so-called 'free-to-play' games.

The FTC's chairman Jon Leibowitz confirmed the planned investigation following a request from Massachussets senator Ed Markey. "We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases," said Leibowitz in a statement seen by the Washington Post.

"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."

Markey had raised the issue following media reports that children were unwittingly racking up large bills in mobile and social games, with Capcom's iOS title Smurfs' Village particularly making headlines after claims that an 8-year-old girl had spent $1400 on in-game items.

Observed Markey, "What may appear in these games to be virtual coins and prizes to children result in very real costs to parents."

The Federal Trade Commission said Tuesday it will review the marketing and delivery of mobile applications that charge users for products and services, such as through Apple's iTunes store.

FTC Chairman Jon Leibowitz wrote in a letter to Rep. Ed Markey (D-Mass.) that the practice of "in-app purchases" for certain applications on Apple iPhones, iPads and iPods raised concerns that consumers may not fully understand the ramifications of those charges. The Washington Post wrote about hefty charges amassed by children using Apple device games that public interest groups said should not be included in software geared for children. Some parents said their children didn't understand the difference between real and pretend purchases for items such as $99 barrels of Smurfberries on the Capcom Interactive game Smurfs Village.

"We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases," Leibowitz wrote. "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."

An FTC spokeswoman acknowledged the letter but declined to comment further. Apple did not immediately respond to an interview request.

“After the Washington Post first broke this story earlier this month, I sent the Federal Trade Commission a letter calling on the agency to investigate the issue of 'in-app' purchases and provide additional information about the promotion and delivery of these applications to consumers, especially with respect to children," Markey said in a statement. "What may appear in these games to be virtual coins and prizes to children result in very real costs to parents. 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."

Separately, the FTC and Justice Department have launched antitrust reviews into Apple's subscription service for publishers, according to The Post's Ian Shapira. The agencies are looking into Apple's dominant position over mobile applications through its iTunes store to see if it is unfairly using its market dominance to pressure buisness partners.

Update: Capcom refutes talk of Apple dispute

Update: Capcom has denied rumours of a rift with Apple. In a statement sent to PocketGamer, the publisher claimed that "We are in frequent communication with Apple, and at no point have they expressed any displeasure to any representatives of Capcom Mobile in regards to our handling of in-app purchases within Smurfs' Village."

The firm also said it had not heard of the aforementioned plans to tweak the login process, but "we welcome any update that would minimise inadvertent in-app purchases and improve customers' experience with our products."

Original:

Apple has allegedly issued a warning to Capcom regarding its free-to-play iOS game Smurfs' Village, which thanks to microtransactions has been a recent mainstay on the App Store's highest-grossing charts.

Recent media reports have held that some parents are concerned by the ease with which their children can buy virtual goods in the game, which is age-rated as 4+. One eight year old was found to have spent $1400 on in-game items and currency.

Some items sell for as much as $60, but can be bought automatically if one of the Apple device's users had logged into their iTunes account within the last fifteen minutes.

PocketGamer cites a "well-placed source" as claiming that Apple has been in touch with Capcom about the perceived problem, and that some refunds have been issued.

Additionally, the as-yet unconfirmed report suggests that Apple may soon require more frequent logins from users in order to limit repeat purchases.

Capcom's game does offer disclaimers warning users that real money is involved, plus the option for in-app purchases can be deactivated in iOS devices' settings.