Regulators target “rewarded ads” in children’s games
In recently published updated guidelines on the interpretation of online youth protection statutes, German regulators now expressly consider that advertisements directed at children (in this context defined as minors under 14 years of age) may be in violation of youth protection law if a reward is offered for watching ads. The new guidelines still have to be ratified by all the federal states, but changes to the content are unlikely at this stage. We have already seen a few cease and desist letters from online watchdogs that clearly allude to the new position on rewarded ads.
Advertisement within mobile apps is regulated both by general unfair competition law (implementing the EU Unfair Commercial Practices Directive, including its famous “blacklist”), and the State Treaty for Youth Protection in the Media (the “JMStV”). Sec. 6(4) of the JMStV has a catch-all provision stating that “advertising that is also aimed at children or adolescents or in which children or adolescents are used as actors must not harm the interests of children or adolescents or exploit their inexperience.”
Does this mean rewarded ads are now illegal in Germany?
No. Two important qualifications must be made: The guidelines expressly refer to ads targeted at children, i.e. minors under the age of 14. Also, the guidelines expressly differentiate between ads that “may” and ads that “must” be considered harmful to the interests of children – with rewarded ads falling into the former category.
The question of whether a rewarded ad in a game violates youth protection law continues to depend on a case by case analysis. It is already not always easy to determine when an advertisement is targeted at children. An ad can have several target audiences, or no specific target audience (aimed at “everyone”). The new youth protection guidelines do not address this important question, and the little available case law is unfortunately also contradictory and ultimately not very helpful.
In practice, criteria that can be used in this determination include such factors as the language and design of the advertisement or the game itself, but also whether the ad uses classic children’s IP. Conversely, if a game as such clearly does not target children (e.g. mature subject matter or high degree of complexity), it will be easier to argue that advertisements it contains are also not aimed at children.
For a more detailed analysis and recommendations regarding the new guidelines, please refer to this blog post.
Legal status of youth protection software
Under the JMStV rules, providers of content that is not suitable for all audiences must prevent access for users of the concerned age groups either by technical means, access time restrictions, or standardized XML age labelling that can be read and processed by “approved youth protection software”. Such approval is granted by industry self-regulatory bodies, but under the oversight of government regulators. The Administrative Court of Berlin recently sided with the former in a dispute around the approval of such filter software.
What happened so far
Back in May of 2019, the federal states’ joint regulator KJM had nixed the approval of “JusProg”, currently the only such approved software, arguing that it was not suitable because it was not available for all operating systems, in particular on mobile devices. What’s more, the regulator ordered its decision to be immediately applicable, i.e. even pending any appeal.
Alternative compliance strategies
For content providers, this would have meant the need to immediately switch compliance strategies to technical means or time limits (e.g. availability only from 10 PM to 6 AM for 16+ content). Technical means might include providing separate access credentials after verifying a user’s age through video chat or checking their Federal ID Card number, or even having them enter their Federal ID Card number each time they want to access the relevant content.
Court provisionally restores filter approval
However, the courts did not follow suit. In an emergency interim order issued following an application by the concerned industry self-regulatory organization, the Administrative Court of Berlin restored the approval of the JusProg filter software pending the final outcome of the appeal.
The judges did not limit their considerations to the question of whether the matter was so urgent that the decision had to be enforced already pending the appeal. They also argued that the regulator’s decision was likely illegal, as neither the wording nor the purpose of the law nor in fact the legislator’s documented intentions required each individual piece of filter software to be available for all conceivable operating systems in order to receive official approval.
While this decision likely foreshadows the outcome of the appeal itself, content providers relying on XML age labels to comply with German law should of course keep an eye on developments and think about contingency plans in case the outcome is ultimately different.
General outlook: Reform on the horizon?
As recently as during gamescom (late August 2019), representatives of the German federal government have reiterated their intention to publish draft legislation for a comprehensive reform of youth protection law before the end of the year. It remains to be seen whether – and how – the reform will affect these issues.