Articles Posted in Law & Technology

What happens when “freemium” isn’t free? Parents of children who allegedly spent (in some cases) over $300 “at a time” on free-to-download apps are wondering the same thing. The controversy is centered on apps marketed to the public as “free” but that allow for the purchase of game currency (at real cost) once game play begins. According to parents in In re Apple In-App Purchase Litigation, 5:11-CV-1758 (N.D. Cal.; Mar. 31, 2012), their children added hundreds of charges for in-game currency during a fifteen minute window (while their password was still active) after downloading the free app. These parents believe this practice was deceptive and violates California’s Consumer Legal Remedies Act, Cal. Civ. Code 1.5 Sec. 1750-1784.

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Parents in New Jersey may be protected by New Jersey’s Consumer Fraud Act. N.J.S.A. 56:8-1 et seq. The NJ CFA is nationally recognized as consumer friendly and represents one of the strongest stands against deceptive business practices. It includes provisions for mandatory treble damages, attorney’s fees and does not require the plaintiff to prove intent. See Cox v. Sears Roebuck & Co., 138 N.J. 2, 24; N.J.S.A. 56:8-19. Considering the number of downloaded apps in New Jersey alone, there exists the potential for massive liability on Apple’s part. Rather than be subject to New Jersey’s strong consumer protection law, Apple would prefer to stick with California’s. A New Jersey parent suing Apple in New Jersey under the CFA will certainly face an objection to the application of NJ law. Apple will say that when the parent downloaded the app, she agreed to the “Terms & Conditions” and so CA law applies.
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