'Free' web and app-based children's games – in which only portions are accessible without payment – are being scrutinised by the Office of Fair Trading (OFT).
The regulator has launched an investigation into whether children are being unfairly pressured or encouraged to pay for additional content – such as new levels or features or faster game play – with upgraded membership or virtual currency such as coins, gems or fruit.
The body has written to companies offering free web or app-based games, seeking information on in-game marketing to children. It is also asking for feedback from parents and consumer groups about potentially misleading or commercially aggressive practices.
The investigation is exploring whether these games are misleading, commercially aggressive or otherwise unfair … and in particular whether they include 'direct exhortations' to children – a strong encouragement to make a purchase, or to do something that will necessitate making a purchase, or to persuade their parents or other adults to make a purchase for them. This is unlawful under the Consumer Protection (from Unfair Trading) Regulations 2008.
The OFT will also consider whether the full cost of some of these games is transparent when they are downloaded or accessed.
The OFT's Senior Director for Goods and Consumer Cavendish Elithorn, said: "We are concerned that children and their parents could be subject to unfair pressure to purchase when they are playing games they thought were free, but which can actually run up substantial costs. The OFT is not seeking to ban in-game purchases, but the games industry must ensure it is complying with the relevant regulations so that children are protected. We are speaking to the industry and will take enforcement action if necessary."
The body is also seekng information from key players in the sector, including developers and hosting services, in order to understand business practices and establish whether consumer protection regulations are being breached and if so, what the consumer harm is.
As an example, in April 2013, 80 of the 100 top-grossing Android apps in the UK were free to install and raised revenue through in-app purchases.
Single purchases of virtual currency typically range from a few pence to £70 or more. According to Ofcom, home internet use for five- to seven-
year olds is 67%, for eight- to 11-year olds is 82% and for 12- to 15-year olds is 90%. In 2012, 28% of children aged five to 15 owned smartphones, an increase from 20% in the previous year.