The OFT has launched an investigation into whether marketing for children’s online games which encourages children to make “in-app” purchases breaches the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277). An “in-app” purchase is a purchase of additional content, features or functionality in an online application (app) such as a game. Typically, the game app itself is offered free to the consumer, with revenue generated from in-app purchases. The OFT is now investigating if the full cost is transparently advertised before the game app is downloaded, as failure to do so is potentially an unfair commercial practice under the Regulations. It is also examining whether children are encouraged to make in-app purchases or pester their parents to do so, potentially in breach of paragraph 28 of Schedule 1 of the Regulations which ban “direct exhortations” to children. The deadline for submissions to the OFT is 28 June 2013. The OFT will publish the outcome of its investigation by October 2013.

Please contact Christopher Evans of Druces LLP’s Corporate & Commercial team for further information.

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