EU Scrutinises Online Games Providers

EUROPEAN UNION officials have called a multi-party meeting to discuss selling practices used in online games. Internet giants Microsoft, Google and Apple will meet consumer groups and officials from various member states. The meeting is in response to growing criticism about the ease with which young children can amass online debts.

‘Freemium models’ are widely used by online games retailers. These models offer a free entry level product which is leveraged through sales of premium features. Parents have been angered by unexpected bills and a lack of warning that their children are making such purchases. Charging can be confusing, as ‘free to download’ games might not actually be ‘free to play’. The susceptibility of children to in-game marketing and the seeming lack of purchasing controls make this an urgent consumer protection issue.

This follows last month’s announcement that Apple would refund $32.5m as part of a deal with the American Federal Trade Commission. The Federal Trade Commission said that Apple had received ‘tens of thousands of complaints.”

Game Mechanics: Advanced Game Design

Consumer Protection and Online Sales

Retailers, console and games providers may argue that parental controls are widely available and can be used to prevent ‘unauthorised’ purchases. An inquest in the UK recently heard the tragic case of Henry Tattersall, a 13 year old who spent £422 in 4 days buying online games using his mother’s credit card. Faced with the magnitude of the debt, Henry tragically committed suicide. The Henry Tattersall case brings into sharp focus the need for a consumer protection debate and a range of safeguards to prevent children getting into similar debt.

Consumer concerns centre around 4 main themes and will form the basis for the forthcoming EU meeting:

  1. Games advertised as “free” should not mislead consumers about the true costs involved;
  2. Games should not contain direct exhortations to children to buy items in a game or to persuade an adult to buy items for them;
  3. Consumers should be adequately informed about the payment arrangements and purchases should not be debited through default settings without consumers’ explicit consent;
  4. Traders should provide an email address so that consumers can contact them in case of queries or complaints. *source [1]

According to Commissioner Neven Mimica: “Consumers and in particular children need better protection against unexpected costs from in-app purchases. National enforcement authorities and the European Commission are discussing with industry how to address this issue which not only causes financial harm to consumers but can also put at stake the credibility of this very promising market. Coming up with concrete solutions as soon as possible will be a win-win for all.”

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EU Common Position on Online Games – Further Reading

*source [1].

References

[1] Commission and Member States to raise consumer concerns with app industry, European Commission – IP/14/187, 27/02/2014

Further Reading on Consumer Protection