Acting to stop harm: the FCA and Appointed Representatives
If you have young children of your own or nieces or nephews you have probably endured hours of Dora the Explorer, Peppa Pig, In the Night Garden (I could go on) and will have therefore also borne witness to the barrage of advertising for various children’s toys and games and the “hard-sell” techniques targeted at young viewers.
These adverts seem to have something of a hypnotic effect, whereafter a tense set of negotiations will follow between parent and child. On the one hand there is the child’s desire, no, need for that Scalextric/Furby/Barbie Goes Ice Skating Ice Rink and on the other, the frustrated parent’s sideways glance to the pile of long-forgotten toys which were “vital” to the child’s well-being only a few short months before.
Children are suggestible. It doesn’t take a PhD in Psychology to work that one out. Further, children are highly affected by emotive advertising and as such are labelled as “vulnerable consumers” to whom higher levels of protection should be afforded. It is this assessment of young consumers that lies at the heart of the OFT investigation and corresponding report (published on 26 September) in relation to children’s app and web-based games.
A number of concerns were raised during the investigation which started in April this year and examined closely 38 app and web-based games. The OFT uncovered 5 broad areas where it considers improvement is needed. This blog sets out the key problem areas.
First, and somewhat obviously, consumers must be in a position to make transactional decisions which are fully-informed and not as a result of misleading or incomplete information. This might apply to games which are initially free and then require the player to make a purchase to access additional levels or other items necessary to proceed. All prices should be made clear to the potential purchaser up front and in any event before signing up or downloading. All types of costs need to be set out including initial signing up costs, subsequent unavoidable costs (should the player wish to continue playing the game) and other optional costs such as purchasing additional content to enhance the experience.
Misleading advertising is also highlighted as a problem. In particular, the inclusion of screenshots depicting content which is not included in the game for free or as part of the initial sign up cost and which might mislead the consumer into thinking that it will be able to access that content for no additional fee. This is a typical ‘batteries not included’ scenario. Buying a Sylvanian Families animal figurine does not entitle you to the entire Sylvanian Families model village just because it was shown that way on the TV ad. This sort of discrepancy will be patently clear to a consumer buying a toy or game from a shop, where it can see what it is buying, whereas a purchaser of an online game will not necessarily be aware that the content shown on-screen will not be available without further purchases being made. The OFT recommends that only free content or that which is available in exchange for the initial sign-up fee for the game should be displayed in such advertising.
Consumers should also be informed as to whether the game contains marketing, either the trader’s or that of a third party. Additionally, if data (personal or otherwise) is to be collected from the player, then the reasons why that data is being collected should be communicated clearly to the consumer. Guidance states that personal data supplied by the consumer should only be used (for example) to communicate with the consumer about the game itself and not for other purposes.
Further, consumers should be informed whether an additional purchase is strictly necessary in order to progress in the game. In some instances an alternative will be available, such as waiting or “grinding” through a game. When such an alternative is available, this should be communicated to the consumer in an equally prominent manner to the paid option. Moreover, the OFT warns against commercial practices which are exploitative of young users.
The OFT saw messages in games where the consumer was made to feel inferior if it did not purchase further content or was led to believe it was letting down other players or even disappointing or mistreating the characters within a game by not making further purchases. Examples included ‘your Cat/dog/fish is hungry and sad’ and ‘purchase further content to feed him/cheer him up.’ These statements are clearly manipulative and should be avoided when dealing with inexperienced and naïve consumers.
However the OFT does not seek a blanket ban of commercial messages and in-app purchases within children’s games, it merely wants the commercial aspects to be separate and distinct from gameplay itself. For example, a compliant commercial message will simply give information about an upgrade or potential further purchase and provide a “click for more information” link or the options of “go to shop” or “cancel and wait”. A non-compliant game will contain a direct incitement displayed during and interwoven with gameplay, such as “Upgrade your account now”. Perhaps keeping gameplay and commercial messages separate in this way will prevent young players making snap decisions whilst in the throes of a game. Although, arguably, the only practical difference between the two examples given is an extra mouse-click or finger swipe.
Finally, the OFT highlights the problems with Continuous Payment Authority and app-based games. Many mobile devices contain default settings which, once a password has been entered, allow further purchases to be made for the next 20 minutes without re-entering a password each time. The OFT recommends that this should be an optional setting rather than a default setting. Better still, the consumer should have to re-enter its password every time an additional purchase is made so that informed consent is being given for each additional purchase.
In response to these issues the OFT has drafted a set of principles setting out how the existing consumer protection law framework should apply to app and web-based games and providing guidance to those within the industry. The ‘Principles’ encourage self-regulation, which seems sensible given the difficulty of enforcement and the fact that the law is likely to always be playing catch up with this innovative and fast-paced sector.
The OFT is currently inviting responses to its proposed principles.
You may also be interested in our earlier blog on Targeted advertising and Privacy.
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