App Developers Face Deadline For In-App Purchases

Mobile app developers are facing a tight deadline to comply with new regulations surrounding the controversial issue of in-app purchases.

The Office of Fair Trading (OFT) has warned the online game industry that it has just two months to get its house in order, over the issue.

OFT Deadline

The OFT began its own investigation into in-app purchases last April, after a sharp rise in complaints about children purchasing items worth thousands of pounds, unbeknown to their parents. In September, the OFT published its proposed rules for governing in-game purchases, so as to ensure children are not being unfairly pressured or encouraged to pay for additional content in web and app-based games.

The investigation took place because many modern games such as Zynga’s Farmville, EA’s Real Racing 3, or Kabam’s Kingdoms of Camelot, are free to play or install. However, in order to unlock more content or upgrades, in-game currency usually has to be acquired via in-app-purchases. Currently, 80 of the 100 top-grossing Android applications employ this ‘freemium’ model, and according to the OFT, nearly 90 percent of children aged between seven and 15 have played online games in the past six months, with half paying to play at least once.

And now the OFT has published its ‘final principles’ for online and in-app games. It has given games producers and developers a deadline of 1 April to ensure their games do not breach consumer protection law.

The OFT principles state that consumers must be told upfront about costs associated with a game or about in-game advertising. Consumers must also be told any other important information, such as whether personal data is shared with other parties for marketing purposes. And finally, the OFT principles also make clear that in-game payments should not be authorised, and should not be taken, unless the payment account holder, such as a parent, has given his or her express, informed consent.

The OFT warned that failure to comply with these principles could risk enforcement action.

Positive Engagement

Meanwhile the OFT has also provided parents with the following advice.

• Check the ‘payment options’ settings on the device. One option is to make sure that a password is required for every purchase, rather than opening a ‘payment window’ in which the password will not be needed for any further payments.
• Check whether there are any in-game purchases or whether the game contains a social element by looking at its description on the app store or the game’s website.
• Play the game themselves to understand what children will see.
• Be aware that game content could change via automatic updates, so check regularly that they continue to be happy with their children playing a game.

The OFT said it had received “positive engagement” from the games industry over the matter, and that significant improvements to the practices in the industry have already been made by many firms. However many games and apps are developed overseas, and it is not clear at the moment how the OFT intends to police this foreign software. The OFT for its part states that it is “working closely with international partners” to ensure  that its principles are consistent with the laws of most key jurisdictions, in order to help to raise standards globally.

“Many children enjoy playing these types of games. This rapidly growing creative sector has also brought wider economic benefits,” said Clive Maxwell, OFT chief executive. “The on-line and apps based games industry has already made significant improvements during our consultation process. But it still needs to do more to protect children and treat its customers fairly. Our principles make clear the type of practices that games makers and platform operators should avoid.”

“Parents and carers have an important role to help protect their child and their bank balance,” said Maxwell. “Our advice is that parents check their device settings, play their child’s games themselves and read the game’s description online. Parents will also be encouraged to report concerns to Citizens Advice.”

The OFT said it will have access to complaints from 1 April and may use them when deciding whether to take enforcement action against publishers and developers.