The Federal Trade Commission has blasted Apple and Google, suggesting the two companies' prohibitive mobile platform charges force developers into predatory revenue streams. This comes in a statement made regarding advertising middleman Tapjoy, against whom the FTC has filed a complaint over unfair practices.
What has the FTC said about Apple and Google?
In the FTC's public statement - which you can read in full right here - the Commission says Apple and Google are "gaming gatekeepers" who force developers to adopt potentially harmful mobile monetization due to punitive taxation and rent charges. Apple and Google charge up to 30% of sales in order for developers to keep games on their platforms, and a developer not being listed on either the Play Store or the App Store is an "effective death sentence". Because of this, developers turn to revenue streams like loot boxes, "intrusive behavioral advertising", and middlemen such as Tapjoy, the latter of which the FTC says "creates opportunities for fraud".
As part of its statement, the FTC points to Hyperbeard, a developer of mobile games for children. In a previous FTC complaint, Hyperbeard was accused of letting major advertising networks surveil users, including children, "to serve behavioral advertising". The FTC says Google specifically encourages game developers to adopt this monetization model, as the tech giant says users "expect free games", so developers should monetize using advertising.
This isn't the first time Apple and Google have been blasted for prohibitive costs. Last year, Fortnite developer Epic Games sued Apple over the latter's removal of the game from its App Store. Epic had attempted to implement its own payment system in order to circumvent Apple taking a percentage of its earnings from the game. This was deemed to violate Apple's guidelines, so the game was removed. That lawsuit is still ongoing. Epic also brought a similar suit against Google for removing Fortnite from the Play Store, alleging that Google's payment restrictions constituted a monopoly.
The FTC's complaint against Tapjoy
The FTC describes Tapjoy as a "middleman between advertisers, gamers, and game developers". In essence, Tapjoy displays offers in a mobile game, with consumers able to complete certain tasks to redeem these "offers" for in-game currency. The offers could take the form of signing up for a subscription or making a purchase. Once the transaction is complete, gamers receive in-game currency, and Tapjoy gives a portion of its advertising revenue to developers. However, the FTC says players "jumped through hoops", spent real-world money, and submitted sensitive data to Tapjoy only to receive nothing in return. The FTC goes on to conclude that Tapjoy "amplified false offers" by advertising partners and then "did little to clean up the mess", even in the wake of thousands of complaints.
Tapjoy conduct, in the FTC's view, violated a prohibition on unfair practices and a prohibition on deceptive practices. A proposed settlement by the FTC will require Tapjoy to screen and test its partners for fraud. The FTC says this provision will ensure Tapjoy "takes more responsibility for fraud, rather than facilitating it". You can check out the proposed "Agreement containing Consent Order" right here. In essence, the agreement requires Tapjoy to make clearer the nature, terms, and delivery methods of the rewards it's offering, as well as to work more efficiently to weed out fraud amongst its advertisers. The agreement itself is rather long and chock-full of legalese, so read it at your own discretion.
How do you feel about the FTC's comments regarding Apple and Google? Let us know in the comments below!