Apple, Google, Amazon Reach 'Freemium' Pact

MILAN-- Apple Inc., Google Inc. and Amazon.com Inc. reached an accord with Italy's Antitrust and Competition Authority that allows the U.S. companies to avoid fines for allegedly misleading people to make purchases in mobile phone apps that are initially free to download.

The three companies, which run stores to download apps, and Gameloft, a French game developer, committed to make changes including removing the words "free" from the apps that could require payments once a person has started using them, the regulator said on Friday. The companies also agreed to make it clearer within the apps when people are about to make a purchase.

The changes will be applied across all European Union countries.

The investigation began last May following a complaint from an Italian consumer association and came after the EU had called on companies to change the "freemium" model in which apps are free to download, but then can later require payments that sometimes get automatically charged to credit cards.

"Consumers can now count on stronger guarantees than what would have been achieved by sanctioning the companies involved," said the Italian regulator, which carried out the investigation in conjunction with the EU Commission.

The companies, which have 60 days to implement the changes they agreed to make, had faced a maximum fine of EUR5 million ($5.65 million) each.

The freemium model, which can include payments to access new levels or acquire a virtual object that makes a player more powerful, accounts for more than half of the EU online games market.

The EU has forecast that the bloc's "app economy" will produce EUR63 billion in revenue in 2018, more than triple the 2013 figure, and that the long-term health of the industry could be threatened by consumer confusion with the fermium model.

Google and Amazon declined to comment. Apple and Gameloft couldn't immediately be reached for comment.

Write to Eric Sylvers at [e-mail]

Access Investor Kit for Gameloft SE

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0000079600

Access Investor Kit for Amazon.com, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0231351067

Access Investor Kit for Apple, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0378331005

Access Investor Kit for Gameloft SE

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US36467V1017

Access Investor Kit for Google, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US38259P5089

Access Investor Kit for Google, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US38259P7069

Subscribe to WSJ: http://online.wsj.com?mod=djnwires