FTC Strikes Blow Against In-App Purchasing and the Future of Wearables in the Enterprise

In-app purchases continue to be a silent killer for users who might not realize they are spending money.

This week, Google Play, prompted by the Federal Trade Commission, announced they would refund at least $19 million to parents who were billed for in-app purchases made by kids tricked into spending what they thought was “fake” money. Because most apps are free these days, developers have found strategic ways to monetize their work by encouraging users to spend money within the apps.

A staggering 98 percent of app store revenues for Google came from in-app purchases in free apps – and it’s not just Google Play that’s benefitting. ­According to our App Reputation Report, 58 percent of the top free Android apps and 55 percent of the top free iOS apps allow for in-app purchases.

Although news headlines are focused on in-app purchasing associated with children buying virtual games and toys, it can also impact the enterprise. The BYOD phenomenon remains alive and well, and when an employee has carrier billing of in-app purchases, employers may incur unauthorized costs. If employees have their cell phone bill reimbursed, the company may end up with the bill for the virtual games and tokens.

Appthority is able to analyze and identify which apps allow in-app purchases without consent or confirmation pop-ups. So, whether it’s a child buying virtual fish food for 3 real dollars on their parents Visa or employees unknowingly passing on in-app purchase charges to their company, there’s a big financial risk.

In other news (as you may have seen via your cluttered Twitter feed) this week, Apple’s much anticipated launch event revealed two new products to the world, one being their first wearable: the Apple Watch. The new watch was showcased performing some business functions such as e-mail and hotel check-ins, making wearables the next wave of the BYOD storm. According to many journalists, Apple’s launch is the epitome of wearables moving into the enterprise space.

These new wearable technologies could mean good things for productivity and creativity in the workplace. However, unfortunately, this also means a new attack surface and potentially higher risk for privacy and security breaches. As we previously mentioned in our blog post about wearables emerging in the enterprise, apps will also be bundled with these wearables introducing more bugs and risks. Check out our thoughts on how wearables, mobility, and data are converging to influence risk here.

Thoughts or comments on this week’s news? Reach the Appthority team on Twitter at @Appthority.