Apple App Store No Longer Labels Free Apps as 'Free'

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By Krystal Steinmetz

The Apple (AAPL) app store has swapped its "free" button with a "get" button in an effort to be more transparent about the potential costs of in-app purchases. According to The Christian Science Monitor: "The [European Commission] says that the free labeling misleads consumers, since small transactions for power-ups and add-ons can quickly pile up. The EC is trying to get app sellers to stop inadvertent in-app purchases." Even apps with no in-app purchase options are no longer labeled "free."

Google (GOOG) made a similar change in its European app store last summer, labeling its free-to-download apps with an "install" button instead of a "free" button, the Monitor said. Apple's changes are worldwide.

According to Re/code, critics of the free-to-play business model, where the initial app download is free but in-app purchases often follow, are likely celebrating the change. It wrote: "Free-to-play is the dominant business model in mobile app stores, representing 92 percent of all revenue on iOS and 98 percent of revenue on Google Play in 2013. But critics say free-to-play games can be designed in ways that hurt the gaming experience or, more seriously, manipulate players into making unnecessary purchases.

An Issue for Parents

As part of a settlement with the Federal Trade Commission earlier this year, Apple agreed to refund a minimum of $32.5 million to customers for their kids' unauthorized in-app purchases, which sometimes totaled hundreds of dollars. The FCC also sued Amazon (AMZN) for similar reasons.

App Annie vice president Marcos Sanchez told Re/code he doesn't know if Apple's change will impact consumers' buying habits. "I'm not completely sure, but one could argue that it is a more 'action' oriented, pro-active word, which could have a positive effect as a call to action," Sanchez said. "Small changes can sometimes have a positive impact."

Before I download an app on any of my devices, I check to see if it offers in-app purchases, especially if I'm getting an app for my 4-year-old to use. I prefer to pay a few dollars upfront to purchase and download an app that doesn't have any follow-up purchases. At least that way I know its true costs.

I've also required that my Kindle ask for a password before any purchases can be made. That way I avoid my kids trying to buy added features without my knowledge or approval.

What do you think of Apple's change to its "free" apps? Share your thoughts below or on the Money Talks News Facebook page.
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