The OFT investigates in-app purchases

The Consumer Protection from Unfair Trading Regulations 2008 (Regulations) prohibit unfair commercial practices that are misleading or aggressive.  The Office of Fair Trading (OFT) is currently investigating whether the marketing of additional content or features in children’s web and app-based games are in breach of the regulations.  These games are usually free to access but allow the user to make 'in app' purchases which, for example, upgrade their game with additional levels or features that are only available if paid for.  Advertising of these paid for add-ons will be unfair if they are unclear or if they make a direct exhortation to children to buy the add-on or to persuade their parents to buy the add-on for them (pester power).

The OFT is interested to hear from businesses operating in the market and mobile app platform operators.  The deadline for submissions to the OFT is Friday 28 June 2013. Interested parties can contact the OFT with information.  The OFT will publish the outcome of its investigation by October 2013.

Late Payment of Commercial Debts Regulations 2013 now in force

The Late Payment of Commercial Debts Regulations 2013 (Regulations) came into force on 16 March 2013, amending the Late Payment of Debts (Interest) Act 1998 (Act).  They apply to all business to business contracts for goods and services.  It is still possible to contract out of the Act by agreeing a 'substantial contractual remedy' for the late payment of a debt as an express term in a contract.

As a result of the regulations, in cases where parties have not contracted out of the Act, statutory interest will run from certain prescribed time periods.  Prior to the regulations, statutory interest ran from the day after the agreed date for payment of the debt, and if a payment date was not agreed it would be implied.

The regulations amend the act to provide, in cases where parties have not contracted out of the Act, that:

No agreed payment date

Where a public authority or a private business purchases goods/services and a date for payment has not been agreed, statutory interest will start to run on outstanding payments from 30 days after the latest of:

  • receiving the supplier's invoice;
  • receiving the goods or services; and
  • verification or acceptance of the goods or services (where provided for by statute or contract).

Agreed payment date

  • If a public authority purchasing good/services agrees a due date for payment, it must not exceed 30  days from the latest of the events listed above or statutory interest will start to run.  There is no right  to agree an extension. 
  • If a private business purchasing goods/services agrees a due date for payment, as a general rule   statutory interest will start to run from 60 days from the latest of the events listed above, even if the  agreed date for payment is in excess of that, unless the parties have expressly agreed to extend the payment date over the 60 day period and that date is not 'grossly unfair' to the supplier.

The act also provides for fixed compensation amounts for the cost of recovering a debt of between £40 and £100.  As amended by the regulations, suppliers will now be able to recover any costs they incur in excess of the fixed amount of compensation available under the Act.