Technology & eCommerce Regulation in the Spotlight

The Advertising Standard Authority in the UK (“ASA“) has recently released updated guidance on the dos and don’ts for advertisers and publishers of in-game purchases advertisements (“Guidance“). The aim of the guidance is ensuring that advertisers and publishers do not mislead consumers about the costs and functionality of in-game purchases.

The majority of the guidance relates to in-game advertising and associated online or in-game “storefronts” (i.e., specific areas where virtual currencies can be exchanged from in-game items). However, some aspects apply to advertisement for in-game purchases that are external to the game such as TV and social media. In-game storefronts shall be considered advertising, and hence subject to the Guidance, if the virtual coins can only be obtained by purchasing them in real-world transaction. If on the other hand, the virtual coins can be earned in the game, regardless of the ability to purchase them, the in-game storefront shall be exempted from the Guidance requirements.

According to the Guidance, where consumers can buy a virtual currency, the developers and publishers shall ensure that the cost of currency is clear, stating the price of the item, and if it cannot be calculated in advance, the manner in which it is priced. This is particularly important when the currencies are sold in bundles, with a varying price-per-unit, based on the size of the bundle (e.g. 100 credits for 5£ and 200 credit for 7£). When making comparison between bundles, the basis for comparison should be clear. For example, claims such as “cheapest” should relate to the overall price of a bundle, and not the price-per-unit.

In instances where storefronts are subject to the Guidance, the real value of an item should be made clear to consumers. The minimum requirement to fulfil this requirement will be reflecting to the consumer how much of the virtual currency it currently holds and the price of the digital currency. Advertisers whose products are affected by odd pricing, where the increments of the currency bundles do not match the increments of the item’s virtual currency price (e.g. currencies are sold in bundles of 50 but items are sold for 20 virtual currencies), should also include information about their currency bundles, to allow consumers to determine the real-world cost of the item.

With regards to in-game purchasing, marketers should avoid placing undue pressure onto players to purchase, including short countdown timers, complex offers, significant sums of money etc. What constitutes a “short countdown timer” or “significant sums” will be determined on a case-by-case basis, depending on the type of game and the usual cost of items. Advertisers should ensure not to imply that an item would only be available for a limited time or a specific purchase, if such item will later be made available again. Moreover, advertisements that are directed to children should not include any direct exhortation to make a purchase. When offering loot boxes, advertisers should take care not to misled players about the chances for winning or receiving a rare item, such as suggestions that the next purchase will result in a rare item.

As for external advertising of games with in-game purchasing, the ASA requires to make it clear to the consumer if the game contains in-game purchasing. The prominence of such disclosure will depend on the medium. The ASA also encourages advertisers to provide further information about the type of in-game purchases. In addition, features and content that require a purchase or a significant investment of game time, should not be presented as easily or quickly obtainable through standard play.

The ASA is a self-regulatory agency of the advertising industry in the UK, with no enforcement powers. However, its guidance is largely in line the UK law and it can refer offenders to other regulators for enforcement.

Feel free to contact us if you have any questions regarding the compliance of your aps with the Guidance.

Kind regards,

Ariel Yosefi, Partner
Head of Technology & eCommerce Regulation