The European Commission (EC) has called on consumer protection authorities, and tech firms including Google and Apple to discuss ways to protect kids from unexpected costs of in-app purchases.
The latest move will create clearer guidelines on in-app purchases in the wake of concerns from consumer groups in Denmark, Britain, Italy and Belgium.
While games are often labelled as 'free to download', they are not 'free to play', leading to purchases automatically getting debited from users' credit card.
According to the commission, over half of online games in the EU are marketed as 'free', but carry hidden costs.
EU Justice Commissioner, vice-president Viviane Reding said that Europe's app industry has enormous potential, both to generate jobs and growth, and to improve our daily lives through innovative technology.
"For the sector to deliver on its potential consumers must have confidence in new products," Reding said.
"Misleading consumers is clearly the wrong business model and also goes against the spirit of EU rules on consumer protection.
"The European Commission will expect very concrete answers from the app industry to the concerns raised by citizens and national consumer organisations."
A recent study commissioned by the European Commission revealed that the app economy is anticipated to generate €63bn in revenue by 2018, up from €17.5bn in last year.