A practical guide to free to play mobile games regulation in the EU (in 15 mins)

Jas Purewal

13 January 2015PocketGamer Connects London 2015

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What we’ll talk about

1. Why is the EU regulating free to play games?

2. How is it regulating them?

3. Practical tips

4. Future developments

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About me

I’m a digital entertainment and tech lawyer. 10 years in London, Silicon Valley, then founded a digital entertainment focused law firm, Purewal & Partners, in London in 2014.

I advise games studios, publishers and platforms on contracts negotiation, IP, financing and regulation matters, across all devices (especially mobile).

I write www.gamerlaw.co.uk, the longest running games law blog, and I’m the co-author of the World Intellectual Property Organisation’s book on video games law.

I’m on Twitter: @gamerlaw.

− Three different matters are becoming linked in the eyes of the press, public and regulators in the EU:• Children's usage of new games platforms (esp mobile)• The triumph of the free to play business model in the West • The need to protect consumers in an online world

− Partial regulation existed already, e.g. privacy law, advertising law restrictions, age ratings systems (all of which are growing/changing on their own).

− But question is now whether that existing regulation is enough, or whether new regulation is needed?

Scrutiny of F2P games

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The growing tide of EU F2P regulation in 2014

1. UK consumer protection regulator, Office of Fair Trading (OFT), publishes 8 F2P legal ‘principles’

2. European Commission leads an EU regulator investigation resulting in separate guidance to mobile platforms and other mobile games businesses

3. UK advertising regulator, Advertising Standards Authority (ASA), issues a growing number of decisions on the marketing of free to play games

4. German highest civil court (Bundesgerichtshof) issues a controversial F2P decision against Gameforge

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Obligatory lawyer weasel words

1. Legal caveat: what follows is a flavour of the key issues in EU F2P regulation – but it isn’t an exhaustive manual. In this fast-moving, legally untested area there is no substitute for reading the guidance (and take legal advice if necessary).

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1: if it isn’t completely ‘free’, don’t call it ‘free’• Both UK and EC were against calling F2P

games ‘free’ because they are not entirely free.

• Easier for platforms

• But about developers using ‘free’?

• Dungeon Keeper ASA case

• TIP: avoid using the term ‘free’ in F2P marketing wherever possible

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2: get the app page right

Which of these is the best (legally)?

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3: use T&Cs and a privacy policyUse them, get the wording right, put them in the app description as follows…

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3: use T&Cs and a privacy policy…AND in-game

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4: Give consumers a direct route to you

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5: Consider gating your games?

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5: Consider gating your games?

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5: Consider gating your games?

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6: Process transactions in-store, not in-game

This is part of a requirement to ensure a separation of “commercial intent” from “gameplay”.

Be careful about how you phrase the invitations to purchase content – direct exhortations outside of a commercial context could cause problems (Gameforge case in Germany, Oct 2014).

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7: Always give users the ability to say ‘no’

This requirement straddles multiple requirements: to not be aggressive, to not be misleading and to give users the ability to opt-out.

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8: Offers should be clear, not aggressive and not misleadingIndications that this ad may be compliant:

• Both a ‘yes’ and ‘no’ option

• Transaction takes place via store, not in-game (therefore there is a split between “commercial intent” and “gameplay”

BUT, the timer must be genuine.

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8: Offers should be clear, not aggressive and not misleadingIndications that this ad may be compliant:

• Both a ‘yes’ and ‘no’ option

Indications it may not be compliant:

• Does transaction take place in-store or-ingame? Unclear.

• Actual real money payment is relatively hidden in a small banner.

• Is it truly a “one-time offer”?

• Is the Grenadier truly only available with that offer?

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8: Offers should be clear, not aggressive and not misleadingIndications that this ad may be compliant:

• Both a ‘yes’ and ‘no’ option

Indications it may not be compliant:

• Does transaction take place in-store or-ingame? Unclear.

• Real money value hidden as gems the player won’t yet own.

• Is this truly a “rare offer”?

• Cartoony character then remonstrates with player to reconsider.

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9: give users alternate ways of acquiring paid contentNot a formal requirement, but a regulator may well conclude that a game that only permits real money purchases of F2P content is unfair.

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10: Be very careful regarding children

• Guidance is particularly restrictive regarding games focused on children.

• When is a app focused on children? No clear rules. UK guidance:  

− 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 be downloaded, signed up to or purchased by anyone and is not age-restricted

− the game is featured in a children’s section of an app store

• Some key requirements: wording must be objective and clear to a child. No aggressive practices. Do not directly exhort the child to purchase. Make the commercial context clear and separate to the gameplay.

• Even the perceived appeal to children can cause problems: Gameforge decision.

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Future developments

1. What we can expect to see in 2015:

• The first enforcement action of the UK F2P principles, plus continued ASA activism.

• Further (probably hostile) court developments in Germany.

• Inaugural cases in at least one of France, Italy or Spain.

• Further changes to major platforms (as much motivated by US changes as EU).

But the real unknown is…

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…The $64,000 unanswered question: does F2P have to be legally ‘fair’?

The guidance to date has focused mainly on the format, structuring and marketing of F2P games. But what happens if a regulator decides to assess whether the F2P model itself is ‘fair’ or ‘reasonable’?

ASA adjudication against EA over Dungeon Keeper mobile (Jul 2014:

“Because the game had the potential to restrict gameplay beyond that which would be expected by consumers and the ad did not make this aspect of the role of in-app purchasing clear, we concluded that it was misleading.”

What happens when a regulator starts reviewing F2P mechanics and deciding “gameplay…which would be expected by consumers?”

Thanks!

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........................................................E: jas@purewalandpartners.comW: www.purewalandpartners.comM: +44 774 760 3449T: @gamerlaw........................................................