Consumer Groups Call for FTC Investigation of Android Apps

Advertising Law

Citing a new study, a group of consumer organizations told the Federal Trade Commission (FTC) in a letter that the agency should investigate the marketing of Android apps to children.

Led by the Campaign for a Commercial-Free Childhood and the Center for Digital Democracy, more than one dozen groups drew the agency’s attention to a recent study by the University of Michigan that examined 135 Android apps, including 96 of the most popular apps targeting children ages 5 and younger.

According to the study, 95 percent of the apps contained at least one type of advertising, often embedded into games or activities, requiring children to view ads to continue playing or encouraging the purchase of play items or a more desirable, paid version of the app.

“Employing a business model which relies on revenue from in-app purchases and data-driven targeting marketing, these apps routinely lure young children to make purchases and watch ads, though they are marketed to parents as appropriate for young children,” the groups wrote. “As the research makes clear, these practices are unfair and deceptive to children and parents, and we urge the FTC to take appropriate and swift action.”

In 35 percent of the apps reviewed, advertising videos suddenly interrupted play or appeared where one level ended and before the next began. Some of the apps contained ads in gameplay items that, when clicked, take users to an ad video. For example, in Talking Tom, a present drops from the ceiling into the background. Instead of being an element of the game, it prompts users who click on it to “watch videos and win.”

A number of popular apps require users to watch an ad to continue gameplay or to earn coins that will make play easier or more successful. Other apps feature pop-up ads that cannot be closed immediately. Still others are interactive and force players to engage in a demonstration version of the advertised app before the “X” button appears to close out of it.

In some games, characters even express disappointment or sadness when users do not pay for an aspect of the game, the study found. In Doctor Kids, if a player does not make a purchase that appears on a bubble during the game, the character cries and runs away. Similarly, the characters look sad and shake their heads if a user does not make an in-app purchase in Builder Game.

These examples demonstrate deceptive and unfair behavior by the app makers, according to the letter. “The use of interactive tactics, such as behavioral cues, to promote in-app purchases cynically takes advantage of a child’s limited development capacity, and should not be acceptable in such child directed apps and games.”

Parents were also deceived by the marketing of the studied apps, the groups added, as many of the apps were designated as “educational” despite the findings that they “were rife with disruptive advertising techniques.” The letter stated, “If a child’s play is consistently interrupted by advertising and/or diverted to external websites and stores, the potential educational value of the app is completely undermined.”

The groups encouraged the FTC “to immediately launch an investigation of Android apps designed for, and marketed to, young children and hold developers accountable for their practices.”

To read the letter, click here.

Why it matters: Because the study highlighted many “concerning practices”—from apps being marketed as educational while they constantly stopped to play ads to apps featuring popular characters that encouraged kids to make purchases—the groups requested an FTC investigation. The “hybrid monetization” business model for such apps “has resulted in practices which are unfair and deceptive to young children and deceptive to their parents,” according to the letter requesting FTC action.