The Office of Fair Trading has launched a consultation on proposals to provide protection for children in the marketing of online and app-based games.  Research published in May 2013 indicated that unauthorised in-app purchases by children cost up to £30 million a year in the UK.  It is therefore hardly surprising that the OFT have been conducting a lengthy investigation into this matter since April 2013, seeking to ensure that online and app-based games which appeal to children comply with consumer protection laws.

The investigation, which saw 38 web and app-based games produced throughout the world being scrutinised, confirmed that there are probable breaches of consumer protection legislation occurring – notably a lack of clarity as to the difference between spending virtual money and real money, and the use of guilt-tactics to shame children into making purchases.  Accordingly, the OFT has recently suggested 8 principles which the industry should follow; guidelines which would prevent possible breaches of consumer protection laws.  The principles include requirements that information regarding costs, the business (including contact information for queries and complaints) and material game information is “clearly, accurately and prominently” provided at the outset, before play, downloading or purchasing commences. Moreover, certain distinctions between the game itself and any in-game promotions and additional content requiring payment should be made, notably with no misrepresentations being made as to the necessity of payments for playing the game.  Other principles require that games should not take advantage of the vulnerability and naivety of children and authorisation of all payments by the account holder should be required before any payment is taken.  The report also includes examples of wording and methods which would likely comply/not with the principles. 

Thus far the principles have been met with mixed reactions, with the disparity as to what games will be subject to the guidelines, due to being “likely to appeal to children”, being noted.  Furthermore whilst the OFT has suggested that international harmonisation will be sought, there is a worry that the lack of guarantee in this respect will simply place a significantly higher burden on those marketing games to UK gamers.

The consultation period will close on 21st November 2013, with the principles then to be finalised and published. Following a grace period, the principles will become effective from April 2014 from which date non-compliance may result in enforcement action.  In the meantime it is probable the OFT will be watching the matter closely and providers of online and app-based games which could be considered “likely to appeal to children” should therefore seek to spend this grace period considering the matter and whether their practices correspond.

The OFT's Children's Online Games report and consultation is available here.

The OFT’s proposed Principles for online and app-based games can be viewed here.