Online Gaming (Consumer Protection)

Rob Wilson Excerpts

Tuesday 13th September 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Rob Wilson)]

It is a pleasure to serve under your chairmanship again, Mr Turner. I am grateful to the hon. Member for Midlothian (Owen Thompson) for securing this very important debate on consumer protection and online gaming. His gaming experience is clearly of enormous assistance to his day job, and I welcome his expertise. Our shared objective is to ensure that those who buy and play video games are properly protected. I hope I can answer most, if not all, of the questions he put to me.

I want to start by talking about the enormous value that the video games sector has for our economy, including the Scottish economy. “Grand Theft Auto”, “Lemmings” and some of the other games that the hon. Gentleman mentioned are among the most successful games anywhere in the world. We are extremely pleased to see strong clusters of games development studios in places such as Dundee and Edinburgh, and we will continue to help to support growth through the UK-wide video games tax relief and our UK games fund. Importantly for the Scottish economy, I note that “Grand Theft Auto V”, developed in Edinburgh, was the fastest growing entertainment product of all time. That is an incredible achievement for the people in Scotland who developed that game.

Government statistics published earlier this year show that the creative industries now contribute a staggering £84 billion a year to our economy; that is almost £10 million every hour. We are very proud of our video games industry, which plays a big role in that success, not only in Scotland but throughout the UK, blending the best of British technology and creativity. All around the UK, from Edinburgh down to Brighton, we have world class games creators producing games that are exported all over the globe, and we are working hard to build on that.

Our video games tax relief, for example, is boosting production, creating cultural content and jobs, and benefiting the UK’s overall economy. The Government have paid out some £45 million in video games tax relief since 2014, which supported £417 million of new investment in the UK by games companies, clearly making a big impact.

Video games are popular with UK consumers, not just with the hon. Member for Midlothian. In 2015, the UK games market was worth some £4 billion. That includes £664 million on mobile gaming, up 21% from the previous year. It is important that UK consumers can have confidence in their video games purchasing. They should be clear about what they are buying and what their rights are. It is important that consumers have the information they need about video games content, particularly to ensure that children are not exposed to age-inappropriate material.

The hon. Member for Midlothian asked about monetary exchange and for consumer protection rules to apply. He is right that the statutory rights set out in the Consumer Rights Act 2015 do not currently cover content provided in exchange for data rather than money. However, the Government are keeping that under review, so I hope that offers some reassurance.

New types of games technology and content will continue to push boundaries. It is vital that new business models and features are allowed to develop and flourish. Meanwhile, video games developers and publishers must take their responsibilities towards consumers seriously.

We have taken action, as has been pointed out, to improve consumer protection. For example, last year we strengthened the rights of consumers through the Consumer Rights Act, setting a simple modern framework for consumer protection. This means that for the first time consumers have rights when they buy digital content, including online video games. If a video game does not conform to the contract, a consumer can get a replacement or a repair, or they can get a price reduction or their money back if that is not possible, although that is subject to my earlier comments about what is actually purchased.

The Consumer Rights Act also restricts the use of unfair terms in consumer contracts. An unfair term is defined as one which,

“contrary to the requirement of good faith...causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.”

That could include unfair restrictions on consumer rights or business liabilities. A term that takes away the user’s right to file a lawsuit in his or her home country might be deemed unfair in this way. In any event, under EU law, an EU consumer would often be permitted to bring a claim against a trader in the consumer’s home country, regardless of what is stated in the contract itself. If a court decides a term is unfair, it will not be binding on the consumer, and we have recently been looking more closely at the issue of terms and conditions.

We know that many people do not look at terms and conditions and may miss important information. The Government are exploring ways in which they could be made more user-friendly for consumers. We want businesses and consumers to understand each other better and improve behaviours. Earlier this year the Government launched a call for evidence on this theme, and we are now analysing the submissions that were received. We plan to publish the responses in due course.

There has also been valuable work in relation to in-app and in-game purchasing. The Government welcomed the work done by the Office of Fair Trading, now the Competition and Markets Authority, to set out very clearly the legal responsibilities for businesses in this area. The OFT guidance subsequently published for businesses, “Principles for online and app-based games”, is an invaluable aid for games publishers. The CMA also published helpful guidance for parents reminding them about what they can do to prevent unexpected in-app purchases by their children—for example, by disabling in-app purchasing functions on mobile devices.

I should also like to highlight the positive response of the industry to the CMA’s initiative. Many video games companies worked closely with the CMA on the production of the guidance and have worked hard to promote it within the sector.

We recognise that there have been significant advances in digital technology and the gaming industry since the Data Protection Act 1998 came into force nearly 20 years ago. The Government are reviewing the current regulatory framework to ensure it is fit for purpose for the digital age, while providing suitable data subject rights. The Information Commissioner is the UK’s independent authority responsible for administering and enforcing information rights, providing guidance and advice to individuals and organisations on, among other things, privacy considerations for application developers.

The Information Commissioner has a number of tools at his or her disposal to take action against those who breach the legislation. Powers include the ability to conduct audits, serve enforcement notices and impose civil monetary penalties of up to £500,000.

The hon. Member for Midlothian asked me about children’s safety. I want to stress the Government’s commitment to help ensure that younger consumers are protected from harmful content. We have a robust age rating and labelling regime for video games sold in physical formats such as on discs—or “boxed products”, as they are known in the trade. All such games must by law carry an appropriate PEGI age rating if they are unsuitable for younger children. It is an offence to sell a PEGI 12, 16 or 18 rated boxed product to anyone not old enough.

PEGI ratings are well recognised in the UK and across Europe. They give consumers, particularly parents, the information they need to manage content choices for children. For protecting children from inappropriate material in online and mobile games, which is a global market, the focus is on self-regulation by games developers, publishers and platforms. We welcome the age ratings and other content advice that games developers and publishers are increasingly now adding to online and mobile video games. That includes the international age rating coalition initiative, which has, for example, led to PEGI ratings now being applied to all apps and games supplied through Android-powered devices and through Windows Store.

“Pokémon GO” has been a phenomenon all over the world. It is enjoyed by many in the UK, and most people act responsibly while playing. I have come across people playing “Pokémon GO” when I have been out walking the dog. Indeed, my daughter managed to get me to catch a Pokémon, who I believe was called Fire Fang. There are lots of exotic names in the “Pokémon GO” sets if anyone wants to have a look. It is important that players abide by the law and respect their surroundings.

I understand that during the summer “Pokémon GO”’s developers, Niantic, added some new warnings to the game’s loading screen—for example, reminding players not to trespass and not to enter dangerous areas. Officials have contacted the game’s developers to discuss features of “Pokémon GO” and the advice they provide to consumers in the UK.

This is a complex landscape, as the hon. Member for Midlothian explained, but I believe we are doing good work to protect legitimate businesses, to enable innovation to happen, and to keep consumers confident and safe. I assure all hon. Members that we will not be complacent. We will continue to work together with the industry to adapt the landscape as the video games market inevitably continues to develop, possibly in ways we cannot yet imagine.