U.K. regulators have launched an investigation into makers of apps and games over concerns that they are targeting children with "free" products that end up costing their parents a fortune.
The Office of Fair Trading said it was concerned that some apps and games may be "misleading, commercially aggressive or otherwise unfair," which would breach consumer protection rules.
The government's consumer protection agency said it had contacted companies that offer free web or app-based games to learn more about their marketing tactics. It said it would not identify the companies.
Smartphone ownership among British children aged 5 to 15 shot up to 28% in 2012 from 20% in 2011, according to U.K. telecom regulator, Ofcom.
Phone regulator PhonepayPlus recently published a report saying complaints related to children and online apps had risen by 300% over the last year.
Earlier this year Apple (AAPL, Fortune 500) settled a U.S. lawsuit filed by parents who said their kids downloaded free games from the mobile App Store and racked up hefty bills by buying in-game extras.
Apple agreed to offer a $5 iTunes gift card to any U.S. parent who claimed that their child paid for extras without their knowledge. The company said it would offer larger credits or cash refunds to people who could prove that their bills were larger than $5.
In the past few years, the 'freemium' business model has become increasingly popular in mobile and social gaming. Zynga (ZNGA)'s "FarmVille" led the way for games that are free to download and play but then require players to pay for in-game upgrades or premium content.
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