Apple Inc. (NASDAQ:AAPL) Gets Affected by the New Rules of the European Commission.
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Apple Inc. (NASDAQ:AAPL) has changed its policy regarding the labelling of apps on IOS. It did this because the European Commission had concerns regarding how the smart phone apps should be labelled. The concern was regarding the apps that were labelled as free but have in app purchases. This means that the apps will not be completely free in whole or for the app’s complete life time. Apple Inc. (NASDAQ:AAPL) has made some changes in its app stores due to this.
The apps on Apple’s (NASDAQ:AAPL) app stores were previously labeled as free but now the wording of the download button has been changed to ‘get’. The purpose of the button remains the same which is to download the app but the reason why Apple Inc. (NASDAQ:AAPL) was forced to make the change was that the word ‘free’ implied in app purchases would be free too and the same free app might became a paid app after a year or unlocking some content of the app requires a payment.
The freemium model is the dominant business strategy for Google Inc. (NASDAQ:GOOGL) as well as Apple Inc. (NASDAQ:AAPL) but the critics support the view of the European Commission as it is felt that the word free attracts people to use the app and later the design and functions of the app induces a person to make a purchase which is not fair on the part of the consumer. Although others argue that an app clearly labeled as the demo version does the same thing when the customers reach the end of the demo. They have to pay for the app to use it further.
The four rules the European Commission conveyed to Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOGL) in short include to not mislead a customer of the true costs involved in games and other apps. Secondly, the apps should not directly encourage children to purchase items in apps and should not enforce adults to buy the items for children. Thirdly, consumers should be properly informed regarding the payment procedure and should not be charged through the default method which doesn’t have a clear consent from the user.
Lastly, proper email addresses should be provided to the users so they could log in complaints and feedback to traders of the apps. Google Inc. (NASDAQ:GOOGL) has removed the label of ‘free’ from its apps that had the option of in app purchasing. Other changes include the authorization of users for the in app purchases. Now the developers of apps have to advertise the in app purchases according to the standards set by Google Inc. (NASDAQ:GOOGL) which follow the rules stated by the European Commission.
The change brought forward by the European Union was required to be implemented only in the European Union but Apple Inc. (NASDAQ:AAPL) has applied the change throughout the world. Although the word free is still used in top lists such as top free lists.