response
Ukie response to
OFT consultation
on proposed
principles for
Children’s Online
Games
Cover image
credit: flickingerbrad
Ukie response to OFT consultation on proposed principles for Children’s Online Games
About Ukie
UK Interactive Entertainment (Ukie) is the trade body that represents a wide range of businesses and
organisations involved in the games and interactive entertainment industry in the UK.
Ukie exists to make the UK the best place in the world to develop and publish games and interactive
entertainment. Ukie’s membership includes games publishers, developers and the academic
institutions that support the industry. We represent the majority of the UK video games industry; in
2011 Ukie members were responsible for 97% of the games sold as physical products in the UK. Ukie
is the only trade body in the UK to represent all the major games console manufacturers (Nintendo,
Microsoft and Sony).
Executive Summary
Ukie continue to welcome the consultative approach the OFT have taken. Clear guidance on the
OFT’s interpretation of the law, and any changes to common industry practices that may be
necessary as a result, is preferable to a direct move to enforcement against individual companies.
However, there is not enough clarity in the way the principles have been presented for our members
to be confident about whether or not they will have to make changes to their games or practices.
Our members believe they have been acting within the law in offering their games up to this point,
and have not yet been given sufficient explanation of why this might not be the case.
This lack of clarity has two aspects. Firstly, the specific legal basis for some of the demands being
made in the principles is unclear. Secondly, the examples given leave far too much uncertainty for
companies to have any confidence that they are acting within what the OFT sees as the bounds of
the law. Both of these issues must be solved if games companies are to have any certainty over how
the OFT sees the regulations applying to our industry, and make any necessary changes as a result.
We recommend that the OFT take direct steps to address both issues:

The OFT should set out in detail the regulatory basis for each demand made in the
principles.

The OFT should work closely with the industry to develop far more detailed examples than
those given so far, based directly on common existing practices. We would be happy to help
with this process in any way we can.
The OFT’s interpretation of what represents “children’s” online games also concerns us. As this is
currently interpreted, the higher standards intended to protect children that are set out in these
principles could be argued to apply to almost every game that uses micro-transactions. We agree
that companies offering games directly for children have a heightened duty of care, and a
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correspondingly stricter legal burden. However, as these principles currently stand, the OFT will be
placing these business restrictions on almost all games.
We are also concerned about the international aspect of this issue. UK regulation must not get out
of step with the rest of the globe –this would harm consumers, damage existing businesses, and disincentivise global companies from placing mobile development studios in the UK, at a moment when
the UK is distinguishing itself as a world leader in this field.
This document will explain these concerns as they apply to various principles, rather than going
through each principle in turn.
Clarity of Legal Basis
The consultation document sets out the areas of law which each of the four groups of principles is
based upon. Many Ukie members have informed us that it would be simpler for them to ensure their
games are in compliance if they were given a direct reference to the specific regulation in question
for each demand that is being made of them. Several of the principles make multiple demands and
appear to mix together different regulations.
For example, the introduction to Group One of the principles mentions regulations 5 and 6 in the
Consumer Protection from Unfair Trading Regulations 2008 (CPRs), Schedule 1, paragraph 20 of the
CPRs, the requirement of ‘certain information’ under the Electronic Commerce (EC Directive)
Regulations 2002 (ECRs), and the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCSRs),
all in reference to principles one, two and three.
Principle Two alone makes a broad requirement that any ‘material information’ be provided before
the consumer begins to play, with four specific demands that appear to be drawn from the CPRs,
Consumer Protection (Distance Selling) Regulations 200 (DSRs), ECRs and the Data Protection Act
1998 and which require the following information to be provided:
•
•
•
•
information about the main characteristics of the game
whether the game contains marketing (i.e. promotion of products or services, either of the
trader’s own or of those of a third party)
important terms and conditions, including information on how the consumer may cancel any
agreement
how, and the reasons for which, personal or other data may be collected and processed
It is not clear, for each of these different requirements, which regulation it is that games companies
are in fact being helped to comply with.
It would be very helpful for games companies if the exact legal basis for each principle and each
requirement being made of them were to be listed out. Specific sections of the relevant regulations
should be quoted, followed by explanation of how the OFT believe they translate into the given
principle, and examples of how common practices would be affected (these could be provided in
collaboration with the industry, as discussed below). This would give companies a clearer
understanding of the OFT’s interpretation of the law, meaning they would be more confident about
whether changes to their games or practices are needed.
We have several other examples of uncertainty in the OFT’s interpretation of the regulations which
the suggested exercise would help to clarify. Direct statements on the below would also be helpful:
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1. Principle 1 states that “information about the costs associated with a game should be
provided….before the consumer…agrees to make a purchase”.
Similarly, Principle 2 states that all material information about the game should be provided
up-front….before the consumer…agrees to make a purchase”.
This could be read to mean that such ‘information about the costs’ and ‘material
information’ must be provided to consumers each time a game invites a consumer to make
an in-game purchase. The OFT should confirm that this is not the case, provided that the
consumer is informed how much an in-game item costs prior to the consumer purchasing
that in-game item.
2. Principles 1 and 2: It is not clear where the OFT has derived its legislative authority for
requiring information about the costs associated with a game and the material information
relating to a game to be provided “prominently”. Please could the OFT clarify this.
3. Principle 4: It is not clear to us where the OFT has derived its legislative authority for
requiring the commercial intent of any in-game promotion to be “distinguishable from
gameplay”. Provided that the commercial intent of an in-game promotion is clear and can be
identified, then there does not seem to be a requirement for such in-game promotions to be
“distinguishable from gameplay”. Introducing such a requirement could defeat the
immersive experience that developers strive to ensure their games deliver and consumers
themselves seek out.
Need for further Examples
The principles are broad in their language and often of little additional use to the CPRs themselves.
Principles 6 and 7 are good illustrations of this – they simply repeat the regulations’ prohibition on
‘aggressive practices’ and direct exhortation to children to buy, adding no explanation of what this
means in the specific context of online games.
With the principles doing little to explain what games must do to be compliant, the examples
provided become extremely important in telling games companies what changes they actually have
to make to their games.
Unfortunately, the examples published alongside the principles do not do enough to provide this
necessary information. For all of the principles, games companies have consistently told us that they
are not yet clear on what they actually need to change about their games, or what practices they
need to avoid in future games, to stay in compliance with these regulations.
For principles 4, 5, 6 and 7, there is too much distance between the good practices and the bad
practices given in the examples, leaving a considerable grey area and companies unsure whether
their own games would be considered by the OFT to be in breach of the regulations. Furthermore,
many of the examples do not take into account the context or medium in which IAPs are offered,
which limit their usefulness as guidance.
We recommend that, in the period leading up to the beginning of enforcement in April 2014, the
OFT work with the industry to develop far more extensive guidance setting out their view on the
legality of a wide range of common practices in the online games industry.
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Ukie would be eager to assist with this in any way we can, for the benefit of our members. We
recommend that, as a starting point, the industry provides several example ‘game flows’, showing
how different types of online game lead the player through their experience and present purchase
options. The OFT could provide its view of these examples under the current regulations. We believe
this would provide more useful information for games companies than the current examples, which
present a very stark ‘bad case’ that is hard to find in many games and an over-simplified ‘good case’
which will often not be feasible.
For example, we present below part of a mock-up of a typical ‘game flow’ that a member has
provided for us. The full mock-up represents several different common practices in online games – in
the instance below, one method for informing consumers that they have a choice whether to buy
additional resource directly or wait instead. We propose working with the OFT to understand their
views on the applicability of the current regulations to such common practices.
We propose an on-going process is established through which the industry, through Ukie, shares
similar examples of other common practices with the OFT, to allow a body of clear guidance to be
created.
We have a different concern about the examples presented for principles one to three. On the
provision of information before the game is played, companies already provide large amounts of
relevant information through the terms of use / terms of service they provide. Specifically how this is
relayed to the consumer depends on the platform in question, as the OFT recognise. Further, for
web-based games, this requirement will be unworkable as most terms of use will apply from the
moment the consumer accesses the website. It would be helpful if the OFT could confirm that this
information does not need to be provided to a consumer before it accesses the relevant website.
It would be useful to establish, for each relevant platform, what information is not being provided
under the current standard practice for most games. We appreciate that this will require a three-
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way conversation between different platform holders, games companies, and the OFT as regulator;
we are happy to help make this happen in any way we can.
‘Games likely to appeal to Children’
The OFT intends these principles to apply to any game which is ‘likely to appeal to children’. In the
annexe document published alongside the consultation document proper, the OFT set out their
interpretation of when a game would meet this description. To quote in full:
“It may be reasonably foreseeable that a game is likely to appeal to children through its content,
style and/or presentation. The OFT considers that a game that has some or all of the attributes
included in this indicative and non-exhaustive list is likely to appeal to children. Consideration
should be given to the likely audience before designing commercial messages communicated to
consumers and deciding whether a direct exhortation is to be included:
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
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inclusion of characters popular with or likely to appeal to children
cartoon-like graphics
bright colours
simplistic gameplay and/or language
the game concerns an activity that is likely to appeal to or be popular with children
the game is available to download, sign up to or purchase by anyone and is not agerestricted
whether children are known to play the game.”
This list has almost no selective force: the items on it can between them be used to describe almost
every single game currently on the market. It would seem from this that a game is “likely to appeal
to children” if it is possible it will be played at any point by a child. If this list is retained it must be
made clear that it is illustrative only, that there may be cases of games that satisfy a number of the
criteria listed which are nonetheless not likely to appeal to children, and that each game needs to be
evaluated on its own merits to determine whether the ‘reasonably foreseeable’ test is satisfied.
Further, it is useful to compare this to the approach taken in the UK Code of Broadcast Advertising
(BCAP Code), which is applying the same consumer protection regulations to broadcast advertising.
The BCAP Code distinguishes between:


“Children’s products and services” - products or services of more or less exclusive interest
to children; and
“Products and services of interest to children” - products or services that are likely to appeal
to children but are not of exclusive interest to them.1
Advertisements for the former are under a higher burden than advertisements for the latter,
although the latter still involves some restrictions.
A similar distinction should be incorporated in the area of online and app-based games. Although the
OFT’s own report was entitled “children’s online games” – which would seem to mean “children’s
products and services”, the approach taken to this issue means that the strictest interpretation of
the principles apply in full even to games which are only “of interest to children”.
1
http://www.cap.org.uk/Advertising-Codes/Broadcast-HTML/Section-5-Children.aspx
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Where a game is “of exclusive interest to children”, and intentionally designed and targeted in that
way, we fully agree that the company involved has a duty of care to ensure that the greater
vulnerability of their target audience is in no way taken advantage of through commercial
messaging, and that this should be of clear consideration in the design of the game.
However, where a game is “likely to appeal to children” but not designed intentionally for their
interests – which under the OFT’s proposed definition can be applied to almost all games – it is
damaging to the enjoyment of the majority of consumers to place the game’s design under the same
close restrictions.
The principle to which this is most relevant is principle 6, on aggressive practices. Practices which
“have the potential to exploit a child’s inherent inexperience, vulnerability or credulity” have to be
judged on a subjective, case-by-case basis. We argue that scrutiny for such practices should be
focused on games which are exclusively targeted at children. It is clearly the case that children
should be protected, but the principles need to make it clear that it is children that are being
protected. The OFT’s focus should be primarily on ensuring that the market for children’s games is
free of clearly aggressive practices, before they consider whether games designed for all ages which
might be played by children might be marginally over-stepping the line.
The consultation document discusses the concept of the ‘average consumer’ on page 7. It is here
that the justification for such a broad approach is given.
As they argue, if the trader can reasonably foresee that a group of consumers will be particularly
vulnerable to a commercial practice because of their age, then the average member of that group –
the average child, for our purposes, has to be used as the ‘average consumer’ for considering
whether that commercial practice is unfair.
The OFT believe that, under their definition, the majority of games they have examined are either
directed at or likely to appeal to children, and so the ‘average consumer’ for the majority of the
online games market must be a child.
We believe this is too onerous – that in a significant proportion of the games that the OFT would
classify as ‘likely to appeal to children’ under their proposed test, it is not reasonably foreseeable to
the company providing the game that a clearly identifiable group of their players will be children,
and so their commercial practices should be targeted at the ‘average child’ rather than the ‘average
consumer’. In addition, for some games there are already other protections for children, including
age restrictions; whether a parent chooses to allow their children to play a game; and the fact that
an adult’s credit card may be required in order to make payment.
The extent of actual consumer harm resulting from unfair practices in such games has never been
stated by the OFT. We do not believe that there is evidence of sufficient harm to justify a regulatory
approach that would impose onerous demands on almost the entire market. A recent survey of 500
children aged 6 to 12 by Dubit, a research agency, found that in-game spending by children on
mobile games is well under control by parents:
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71% of children play mobile games
Only 17% of parents allow their children to spend money in-games
Just 2% of children have ever made a purchase without their parent’s consent
The average cost of a single purchase is just £2.07
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No child surveyed had ever spent more than £10 on a single in-game purchase2
It seems clear from these figures that parents have close control of how their children spend money
in these games, and that as a result children are spending small amounts of money.
In other terms, it is unreasonable to subject the majority of online games to a test for unfair
commercial practices on the assumption that their average consumer is a child, unless they are
specifically making games for children. We believe that it is not as reasonably foreseeable for many
games companies that children will be playing their games as the OFT is suggesting.
There is an additional point to make in relation to principle 7, which states that:
“A game should not include direct exhortations to children to make a purchase or persuade others to
make purchases for them”
We assume that this principle is based on:
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CPR, Regulation 3(1) and 3(4)(d): Unfair commercial practices are prohibited. A commercial
practice is unfair if it is listed in Schedule 1 of the CPR.
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CPR, Schedule 1, Paragraph 28: “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.” and
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CAP Code, Rule 5.4.2: “Marketing communications addressed to or targeted directly at
children…
5.4.2 must not include a direct exhortation to children to buy an advertised product or
persuade their parents or other adults to buy an advertised product for them.”
Unlike the majority of the CPRs, Schedule 1, paragraph 28 is not linked to the “average consumer”.
Rather, in order for a direct exhortation to make a purchase or persuade others to make a purchase
to be deemed an unfair commercial practice it needs to be targeted directly at children. Therefore,
our view is that any direct exhortations that are included in a game that is not targeted at children
(even if the game may appeal to children) is not an unfair commercial practice.
The consultation document appears to suggest that principle 7 should apply to all games that are
deemed likely to appeal to children, but this would seem to extend this principle beyond the scope
of the CPR and the CAP Code which are designed to target commercial practices/communications
that are directly targeted at children.
Age of Childhood
For the purposes of these principles, the OFT consider a child to be somebody under the age of 16.
The consultation document does not state what basis this has in law. The Unfair Commercial
Practices Directive, and the UK regulations implementing the directive, do not include any definition
of the age of a child. As such it appears that the OFT has discretion over this. If this is the case, we
continue to question whether 16 is the most appropriate age.
2
http://www.dubitlimited.com/blog/2013/11/07/childrens-in-app-spending-is-under-control/
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The CPRs are concerned with the ability of consumers to make their own decisions, based on a
complete understanding of their situation. We believe that a typical14-16 year old child is perfectly
capable of understanding the difference between virtual and real currencies, and how these are
used in online game worlds – they will be mature enough to deflect anything that might be
construed as an ‘aggressive practice’ when experienced by, say, an 8 year old child. This ability to
understand the value of money is recognised in UK law by 13 being the age at which children are
legally allowed to have a part time job in the UK.3
This investigation appears to be focused on the protection of vulnerable minors. There is a clear
difference in games intended for children of different ages, and it is important that the investigation
focuses on areas where the risk of harm is greatest.
Domestic and international precedent suggests that the age below which children require greater
protection is 13. As stated above this is the age at which children are legally allowed to have a part
time job in the UK; it is consistent with the minimum age limits imposed by major mobile format
holders; and it is also the age below which the USA’s Children’s Online Privacy Protection Act
(COPPA) applies.
There is strong evidence from research into advertising that children under the age of 12 should be
treated differently from teenagers, which we believe applies in this related field of consumer
interactions.
The Livingstone Review for Ofcom in 2006, for example, found that:
“By about 7 or 8 years of age, children have learned to identify the persuasive intent of
advertising, distinguishing it from information. From 12 years of age, children can surely
articulate a critical understanding of advertising, even becoming sceptical or distrustful of
it.”4
Research by the US Institute of Medicine in 2005 found no sufficient evidence that food advertising
had any effect on purchase requests, beliefs, short-term consumption or usual dietary intake for
teenagers aged between 12 and 18.5
It is clear that there is a significant difference between children under the age of 13 and teenagers
above that age in their understanding of advertising and commercial transactions. It is the younger
group where vulnerability and the potential for significant consumer detriment lies. As such, we
believe that the principles will be far more effective in improving consumer protection if they are
focused primarily on games which are of exclusive interest to the more vulnerable under-13 market.
They will also match international practice more closely, which as we discuss below is important for
UK consumers and games companies.
Risk of Competitive Disadvantage for UK Companies
These principles, and the regulations from which they flow, are based on the UK’s implementation of
numerous European directives, chiefly the Unfair Commercial Practices Directive. As such, other EU
member states have essentially the same laws in place, albeit with some room for slight differences
3
https://www.gov.uk/child-employment/minimum-ages-children-can-work
http://eprints.lse.ac.uk/21758/
5
Institute of Medicine, Food Marketing to Children and Youth: Threat or Opportunity, 2005
4
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brought about by differing interpretations. Further, nations around the world are also considering
these same issues under similar unfair practice regulations.
An overly aggressive approach by OFT in applying these principles and enforcing under the
regulations will risk isolating the UK's consumer market. Any intervention that takes the UK market
out of step with global practice would potentially reduce the opportunity to grow the UK industry
and prevent the UK from taking part in this fast-growing global market. UK government has
recognised the growth potential of the games sector, by recently introducing new measures to
improve the skills coming in to the sector and through the introduction of a games industry tax
relief. The growth potential that these measures offer must not be undermined by any
interpretation of these regulations that would risk hindering the continued growth and success of
the UK’s games market.
For this reason, we urge the OFT to continue working with the industry to further refine these
principles and to take a careful and thoughtful approach with any future enforcement. It is critical
that the OFT ensure that its efforts are focused on substantially increasing the protection offered to
children and that UK market does not become competitively disadvantaged and isolated from the
global online market.
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