OFT Investigation: Children and In-App Purchases

The Office of Fair Trading has concluded its investigation into the ways in which online and app-based games encourage children to make 'in-app' or 'in-game' purchases.

The investigation highlighted the presence of potentially unfair commercial practices in this area of gaming.

The ways in which some businesses are marketing to children in relation to in-app or in-game purchases has received much press attention of late. Particularly reports of parents who have received credit card or bank statements showing that their child has spent hundreds of pounds when playing online or app-based games. We reported last month how Apple has decided to alleviate parents' concerns in this regard.

The OFT has formed the view that there is a general gaming industry failure to meet requirements under consumer protection law in this area and has issued, for consultation, a set of industry standards explaining what is expected of them when encouraging in-app or in-game purchases to children. A summary of these principles are noted below.

The consultation ends on 21st November with a final version of the principles due to be published early 2014. Although not yet finalised, games developers and other stake holders are urged to familiarise themselves with these standards and take these into consideration when building new games. While the principles may be amended when finally published early next year, these serve as general guidance as to what is likely to be deemed to comply with the law in this area.

OFT Principles

1. Information about the costs associated with a game should be provided clearly, accurately and prominently up-front before the consumer begins to play, download or sign up to it or agrees to make a purchase.
2. All material information about the game should be clear, accurate, prominent and provided up-front, before the consumer begins to play, download or sign up to it or agrees to make a purchase. 'Material information' includes any information necessary for the average consumer to make an informed decision to play, download or sign up to the game or to make a purchase.
3. Information about the business should be clear, accurate, prominent and provided up-front, before the consumer begins to play, download or sign up to the game or agrees to make a purchase. It should be clear to the consumer who he/she ought to contact in case of queries or complaints. The business should be capable of being contacted rapidly and communicated with in a direct and effective manner.
4. The commercial intent of any in-game promotion of paid-for content, or promotion of any other product or service, should be clear and distinguishable from gameplay.
5. A game should 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.
6. Games should not include practices that are aggressive, or which otherwise have the potential to exploit a child's inherent inexperience, vulnerability or credulity. The younger a child is, the greater the likely impact those practices will have, and the language, design, visual interface and structure of the game should take account of that.
7. A game should not include direct exhortations to children to make a purchase or persuade others to make purchases for them.
8. Payments should not be taken from the payment account holder unless authorised. A payment made in a game is not authorised unless informed consent for that payment has been given by the payment account holder. The scope of the agreement and the amount to be debited should be made clear to the consumer so he/she can give informed consent. Consent should not be assumed, for example through the use of opt-out provisions, and the consumer should positively indicate his/her informed consent.

For further information and advice on legal issues surrounding technology please contact Loretta Maxfield at lmaxfield@thorntons-law.co.uk or any member of our Technology and Innovation team.