Following publication of their proposed principles in October 2013 for marketing online and app-based games, the OFT has recently published its finalised principles. The principles were proposed following market investigation launched in April 2013, after numerous incidents involving children spending up to four-figure sums on in-app purchases without parental permission. Research published in May 2013 indicated that unauthorised in-app purchases by children cost up to £30 million a year in the UK. The investigation highlighted concerns to the OFT regarding potentially misleading, commercially aggressive and unfair practices throughout the industry.
The proposed principles were revised to ensure greater clarification and conformity with relevant law. One notable amendment is the addition of an annexe to the principles, which provides the applicable UK and EU legal provisions. It is hoped that the principles will raise standards internationally.
The principles, which include examples of their application, contain requirements to provide certain information clearly and correctly prior to the commencement of play, downloading or purchasing, such as information on associated costs and material information regarding the game and business. The principles further make clear that games should not be misleading to consumers in suggesting that any payments are necessary if they are in fact not; the commercial intent of in-game promotions should be clear.
The principles refer specifically to children, with further consideration of certain principles being necessary for games which are likely to appeal to children. Such games may be likely to be considered appealing to children due to their content, style and/or presentation and should not involve exploitation - particularly children should not be pressured into making purchases.
All payments should necessitate the authorisation of the account holder, with "express, informed consent" being required. For example, entry of the payment account holder's password should be required to confirm every purchase, rather than a default setting meaning that this is not the case.
The deadline for compliance with the principles is 1 April 2014, on which date the Competition and Markets Authority will assume its consumer enforcement role. Non-compliance could result in enforcement action. Therefore online and mobile games firms should ensure that they are aware of their obligations and comply fully.
This is a rapidly evolving space with ever increasing regulation. The finalised principles follow on from privacy in mobile apps guidance recently issued by the ICO for app developers.
The OFT's principles for online and app-based games can be found here.
The recent ICO guidance for app developers on privacy in mobile apps can be found here.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.