The CMA has referred 3 online games to the Advertising Standards Authority (ASA) to consider whether to launch investigations.
The Competition and Markets Authority (CMA) is concerned that these games may breach the Advertising Codes and consumer law by directly encouraging children to buy, or ask their parents to buy, extra game features.
The referral results from the CMA’s monitoring of the sector following the publication in January 2014 of the Office of Fair Trading’s (OFT) Principles for online and app-based games.
This action is part of the CMA’s wider work to encourage the industry to address issues relating to how online and app-based games are advertised and paid for. The CMA has worked closely with the European Commission, the International Consumer Protection and Enforcement Network, and national consumer protection authorities around the world.
As a result of the joint work Google and Apple made changes, in particular to strengthen payment authorisation settings and to ask games makers to stop describing games as ‘free’ when they contain in-game purchases. These changes are designed to prevent parents being landed with unexpected bills arising from in-game purchases made by their children.
The CMA has today also published advice for parents on what to look out for when their children are downloading and playing online and app-based games.
Nisha Arora, CMA Senior Director, said:
75% of 10- to 15-year-olds in the UK play video games every day, so it’s clear that they are a significant part of children’s lives.
We have seen some positive changes in business practices since we started looking at this sector. However, we are concerned that some games may directly encourage children to buy extra features during the game. We have therefore referred these games to the ASA to consider whether they breach the Advertising Codes.
Miles Lockwood, ASA Director of Investigations, said:
It’s crucial that the ads children see, hear and interact with don’t confuse, mislead or directly exhort them to make purchases.
We welcome the CMA’s referrals and will now establish whether the ads break the rules and to ensure children are treated fairly.
Notes for editors
- The games will not be named unless or until after they are found to have breached the Code.
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. From 1 April 2014 it took over the functions of the Competition Commission and the competition and certain consumer functions of the Office of Fair Trading, as amended by the Enterprise and Regulatory Reform Act 2013. For more information see the CMA’s webpages on GOV.UK.
- The OFT published its Principles for online and app-based games on 30 January 2014. The principles clarified the OFT’s view of online and app-based games industry obligations under consumer protection law. The Principles focused on the way in which games containing in-game purchases were advertised, including the way games were advertised to children. Following the closure of the OFT, the CMA affirmed the OFT’s Principles and undertook monitoring of the sector to assess compliance with consumer protection law. More information on the CMA’s work in this market is available on the case page.
- The ASA is the UK’s independent regulator of advertising across all media. It applies the Advertising Codes, which are written by the Committees of Advertising Practice. Its work includes acting on complaints and proactively checking the media to take action against misleading, harmful or offensive advertisements. The ASA is now considering whether or not the practices which have been referred to them contravene the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing, which reflects the prohibition in the Consumer Protection from Unfair Trading Regulations (CPRs).
- For further advice contact Citizens Advice. Tel: 03444 111444 (England), 03444 772020 (Wales). Website: adviceguide.org.uk.
- 75% of 10- to 15-year-olds in the UK play video games every day according to research by Dr Andrew Przybylski.
- For CMA updates, follow us on Twitter @CMAgovuk, Flickr and LinkedIn.
- Enquiries should be directed to Simon Belgard (email@example.com, 020 3738 6472).