Online Gaming (Consumer Protection)

Patricia Gibson Excerpts

Tuesday 13th September 2016 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Turner. Unlike my hon. Friend the Member for Midlothian (Owen Thompson), I have to confess that I am not a gamer, but I understand the importance and reach of the industry and the challenges that it poses for us in consumer protection.

We know that online gaming has never been so popular or so important in terms of our leisure and our economy as it is now. UK consumer spend on video games is increasing. The total value of consumer sales stood at around £2.8 million in 2015, up 10% on the year before. The direction of travel is clear: the industry will continue to grow and prosper, and the figures clearly show that video game consumers spend more on digital content than physical content.

Of particular concern is the way in which online and app-based games encourage children to make purchases. The Office of Fair Trading set out principles stating that consumers must be told up front about costs associated with a game and about in-game advertising, as well as whether important information, such as personal data, is to be shared with other parties for marketing purposes. Those principles further state that in-gaming payments are not authorised and should not be taken unless the payment account holder, such as a parent, has given express and informed consent. Those words are very important. Failure to comply with the principles can lead to enforcement action.

Guidance for parents is also set out to help ensure that children are not pressured into making in-game purchases, thus reducing the risk of their making unauthorised payments. Despite those principles and precautions, the Competition and Markets Authority, following its monitoring of the children’s online and app-based games market, had cause to refer three online games to the Advertising Standards Authority for investigation on the basis that the advertising code may have been breached by directly encouraging children to buy or ask their parents to buy extra game features. In August last year, two games were found to have breached the advertising code by putting pressure on children to buy a membership subscription. The ASA ruled that the adverts in those games must not appear again in their current form and that tells us that monitoring must continue to be close and careful.

The OFT noted that it is imperative that the games do not pressure children to purchase and that

“exploiting children’s inexperience, vulnerability and credulity, including by aggressive commercial practices”

is simply not acceptable. Increasingly, the gaming industry is moving towards the right to access content, in-app purchases and other downloadable content, so we need to continue to be mindful of enshrining the protection of consumers in law. The video games sector has changed almost beyond recognition, and it is important that the law keeps pace with the innovation and creativity in the industry and how it interacts with consumers. All sensible and practicable measures to protect consumers must be put in place and kept under review by the UK Government in this fast-moving and developing field of technology. The SNP Government will use new, albeit limited, consumer powers to improve consumer rights while simultaneously working to maintain the most competitive business environment possible to allow the industry to continue to thrive.

The funding for this industry, international licences and our ability to affect and be compatible with EU consumer law look uncertain, and the abolition of the post-study work visa, which my hon. Friend mentioned, poses particular challenges for the industry in the post-Brexit era. I will not spend much time on that because my hon. Friend articulated those concerns extremely clearly.

Consumer protection can be challenging in this industry largely, but not exclusively, because of the sheer speed of innovation. We must all be mindful of consumer protection and keep a close eye on it. Consumers must be protected from harm while being empowered to make good, positive choices. That is the environment we need to create for consumers of online games. I am interested to hear what the Minister has to say about the UK Government’s plans to ensure that there is sufficient monitoring. We must strike the correct balance for this thriving industry.