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UK Office of Fair Trading (OFT) publishes its Principles for online and in-app games

- UK

On 30 January the OFT published the final form of its Principles for online and in-app games.

The OFT originally published these Principles in draft form in September 2013 and opened a consultation process that closed on 21 November. (You can read our note on the draft Principles here).

At first sight, it would appear that not much has changed. The OFT has not made any significant changes to the Principles themselves, but has simply expanded and clarified some of them. Indeed if anything, it has made them slightly tougher. However, if one looks slightly more deeply into the OFT's report, there are some interesting points.

Responsibility for compliance

  • One of the most common criticisms that games companies made about the draft Principles was that games companies have to operate within the confines of each platform and this means that it would be difficult, or even impossible, to comply with some of the Principles in full. The OFT has recognised this point to some extent. For example, in relation to the first 3 Principles, the OFT states that platform owners '…should enable games business to comply wither the requirements of Principles 1-3…'
  • Equally however, the OFT has added a corresponding reduction on the obligation of platform owners; the draft Principles stated that, 'Platform operators should satisfy themselves that games operators have provided the information…'; however, the final form of the Principles reduces this obligation by stating that 'Platform operators should satisfy themselves that there are no conspicuous omissions …'.
  • Some platform owners, notably Apple, have already been taking steps to reduce the risk of children running up bills on the credit cards of their parents. Over time we are likely to see platform owners making further changes, particularly following the recent settlement that the FTC reached with Apple in the US which required Apple to refund customers US$32.5m in respect of in-app purchases made by children.

'Likely to appeal to children'

  • Another concern widely raised about the draft Principles concerned the meaning of the words 'likely to appeal to children'. It could be argued that a game such a GTA V is likely to appeal to a lot of children, even though it is rated 18. This is a difficult issue since the relevant legislation does not specify an age for this purpose. Indeed, what is meant by a child varies for different laws and in different countries, even within the EU.
  • Although the OFT has not changed this section of the Principles themselves, it does address this point at some length in a separate document in which it summaries and comments on the responses it received to the consultation: http://www.oft.gov.uk/shared_oft/consumer-enforcement/oft1517.pdf. The OFT points out that it could be argued that the upper age limit for a 'child could be anywhere between 12 and 18. The OFT does not express any clear view about an upper age limit, but instead just provides a slightly cryptic indication that anyone 12 or under is likely to be considered to be a child for these purposes.

The international dimension

  • The OFT's jurisdiction is confined to the UK. Many in the games industry expressed the view that the global nature of the industry meant that the OFT's original investigation and the draft Principles were at best irrelevant and at worst, would put games businesses operating in the UK at a competitive disadvantage. The OFT has repeated its intention to see these Principles, or at least their underlying approach, to be followed by the OFT's counterparts throughout Europe and more widely.
  • On this point, it is interesting to note that the list of organisations that responded to the consultation included the consumer agencies of several other countries including the Netherlands, Sweden and Japan. Compliance with the Principles is, at the least, likely to be seen as evidence of good practice in the eyes of any consumer protection agency. In any event, the OFT's careful and consultative approach is considerably better than that in Germany where the OFT's counterpart took legal action against Gameforge which has resulted in a judgment that is both confusing and contradictory. (You can read more about this decision here: http://www.osborneclarke.com/connected-insights/publications/update-federal-court-justice-bans-ads-virtual-items-online-game-reasons-judgment-available-not-final)

Legal basis for the Principles

  • Another criticism of the draft Principles was that the OFT did not explain the specific legislation on which they were each based. The OFT has responded to this criticism by including an Annexe that seeks to map each Principle against the applicable provisions of both UK and EU law.
  • In addition, the OFT has included in this map the relevant provisions of the Consumer Rights Directive which, in the UK will apply to contracts concluded after 13 June 2014. This is a useful addition and clearly demonstrates that by publishing the Principles, the OFT is seeking to provide clarity about legislation that exists, rather than just dreaming up additional rules itself.

Games businesses have until 1 April to bring their operations into compliance with the Principles. After that, they risk the possibility of enforcement action. This however will not be by the OFT, since 1 April is also the day on which the OFT will be replaced by a new agency, the Competition & Markets Authority.

*This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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