Legal Update - Unfair Commercial Practice

Commercial Law – Unfair Commercial Practice – Office of Fair Trading – Children’s Games – App-based and web-based games

The UK Office of Fair Trading (“OFT”) recently launched an investigation into online and app-based games aimed at children. The OFT will consider whether those games are in line with the Consumer Protection (from Unfair Trading) Regulations 2008 to ensure that any commercial practices are not misleading or aggressive.

What is the reason for this investigation?

The underlying issue that triggered the OFT’s investigation is the growing reports of children incurring large charges through playing games. Many games give players the option to upgrade their memberships from free accounts to paying accounts, or allow in-game purchases to be made. This has resulted in children making purchases that have resulted in their parents’ or other adults’ incurring charges.

The Law

Regulation 3 of the Consumer Protection from Unfair Trading Regulations 2008 (the “Regulations”) prohibits commercial practices that are misleading, aggressive, contravenes the requirements of professional diligence or materially distorts the economic behaviour of the average consumer.

Regulation 3 of the Regulations also prohibits actions listed within Schedule 1. One of these is:

“Including in an advertisement a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them.”

Investigation

The OFT is specifically looking into whether children are being unfairly pressured or encouraged to pay for additional content in so-called ‘free’ games (web and app-based).

“…the OFT is looking into whether these games include 'direct exhortations' to children - a strong encouragement to make a purchase, or to do something that will necessitate making a purchase, or to persuade their parents or other adults to make a purchase for them.”

In doing so, the OFT is seeking information from various groups, such as companies offering these games, parents and consumer groups.

The OFT made clear that it “is not seeking to ban in-game purchases, but the games industry must ensure it is complying with the relevant regulations so that children are protected.”

More information is available on the OFT’s website.

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© RT COOPERS, 2013. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.