On 30 January 2014, the UK's consumer law regulator, the Office of Fair Trading (OFT), published the final version of its principles for online and app-based games ("Principles"). These Principles are the result of the OFT's investigation (launched on 12 April 2013) into unfair trading practices associated in online and app-based games. The regulator has imposed a tight compliance deadline of 1 April 2014 for games companies to ensure that their practices are in line with the Principles.
The OFT published an initial draft of the Principles in April 2013 - see this earlier update for more background.
Who do the principles apply to?
The principles are aimed at game developers and operators. They clarify the OFT's approach to enforcing existing consumer law (specifically the Consumer Protection from Unfair Trading Regulations 2008) in the context of the growing online games market which is predicted to be worth $14.4billion by 2017. The catalyst for the creation of the Principles was the OFT's concern about the effect on children of misleading and aggressive practices by a small number of operators of online and app-based games. The overarching theme of the Principles is one of transparency - ensuring that information is provided up-front, is clear and that consent is given for any payment processing.
What do the Principles cover?
The principles can be summarised as follows:
- Before the consumer begins to play, downloads, signs up to or agrees to make a purchase, the following information must be provided clearly, accurately and prominently up-front:
- details of costs associated with a game;
- the game's main characteristics and any other material information the user needs to make an informed decision;
- information about the game business;
- The commercial intent of any in-game promotion of paid-for content, or the promotion of any other product or service, must be clear and distinguishable from gameplay;
- A game must not mislead consumers by giving the false impression that payments are required or are an integral part of the way the game is played if that is not the case;
- Games must not include aggressive practices, or exploit a child's inherent inexperience, vulnerability or credulity or place undue influence or pressure on a child to make a purchase;
- A game must not include direct exhortations to children to make a purchase or persuade others (e.g. a parent) to make purchases for them; and
- Payment(s) must not be taken from the payment account holder unless properly authorised.
As a result of the high profile nature of the OFT's investigation, it is likely that the OFT will take enforcement action from April 2014 to make an example of any companies which significantly fail to follow the Principles. In addition, although this is an initiative of the UK regulator, game developers, operators and publishers will be subject to enhanced scrutiny from other regulators too, as the issue of child wellbeing in gaming is increasingly on the radar of regulators across Europe.
Since the OFT's investigation in 2013, the OFT chief executive has noted significant improvements in the online and app-based games industry's practices but remains far from convinced that the problem has disappeared. The message to organisations is clear: make sure you assess current user journeys and practices against the Principles before the 1 April 2014 deadline.