Earlier quoted context omitted.
This is clearly a difference between the US and the EU. Most EU citizens (including me) think it is fine to regulate the market, e.g. if it is misleading. Such games are often misleading, since they are not really free. The 'Free' label is just used because people will impulse-install a free application more quickly than a paid application and in the end an addicted gamer will probably spend more through in-app purch…
Apple already does this. I am literally looking at a game right now in the App Store and it's free and Apple makes it very clear that it offers IAPs. It even gives you a list of the Top IAPs. So, listing every IAP, it does not do. But beyond that, it gives you exactly what is being asked.
Say "Free game of the week with paid IAP still included", I don't have a problem with this.