OFT warns games companies to stop pressuring children into in-app purchases

The Office of Fair Trading (OFT) has released a set of guiding principles for businesses behind freemium games, web- and app-based games, to encourage the makers of children's online games to comply with consumer protection laws. This follows aninvestigation by the OFT in April into whether web- and app-based games encourage children to buy products or services. It looked at 38 web- and app-based games which could appeal to children, called for evidence from stakeholders and parents, and met with individual businesses and trade associations.

The OFT identified practices and particular games that do not comply with the a number of consumer protection laws, including Consumer Protection from Unfair Trading Regulations 2008, the Unfair Terms in Consumer Contracts Regulations 1999, and the Electronic Commerce Regulations 2002.

OFT guiding principles for freemium games

The proposed Principles cover four areas:

1. Providing clear, accurate and material information
The investigations found that there was a lack of transparent, accurate and clear information provided before consumers had to decide whether to play a game or sign up for a service.

2. Make the commercial intent clear
Consumers did not know that the game they were playing had a commercial intent until they had committed to it, as they were often described as “free”.

3. Aggressive and exploitative behaviour
Some of the games exploited children’s vulnerability, credulity or inexperience by suggesting, for example, that they needed to buy something for their character to make it popular. Children were also encouraged to buy advertised products or services or ask their parents to buy it for them.

4. Unauthorised payments
Although there were protections for consumers using a continuous payment authority, some of the games removed the need to enter a password to make further purchases, so children playing the game could make in-app purchases without the consent or authorisation of their parent.

The Principles aim to provide guidance to business by explaining the OFT’s view on how the law is likely to be applied. They contain examples of some of the features of the games that caused concern and gives two scenarios showing what the OFT considers is more likely to comply and less likely/unlikely to comply.

The OFT is consulting on the draft Principles and invites comments by 5pm, 21 November 2013.

Janine Paterson, Solicitor, DMA