Looking ahead at UK games regulation in 2022
Games businesses will need to keep an eye on the UK's position on loot boxes, subscriptions, mobile ecosystems and more
With COVID dominating the UK Government's agenda over the past 18 months, much of the regulatory developments for games and technology were put on the backburner.
However, the final few months of 2021 saw the introduction of both the Information Commissioner's Office's Children's Code and the Committee of Advertising Practice's Guidance on advertising in-games purchases, and 2022 is likely to contain several other developments on the topics of monetisation and online safety.
Below are the six hot regulatory topics that we recommend games businesses should be aware of in the coming year:
1. The UK position on loot boxes
The industry was anticipating to hear the government's position on loot boxes in 2021, following its call for evidence issued in September 2020. However, it appears the government's response has been pushed back into early 2022 -- in part likely due to the huge number of responses the consultation received and also the recent appointment of Nadine Dorries as the new Secretary of State for Digital, Culture, Media and Sport.
Although it is not known exactly what the government's response will be, the direction of travel will likely mean there will be at minimum some limitations or restrictions around loot boxes in the future.
2. Competition and Markets Authority (CMA) investigation into PlayStation, Xbox and Nintendo subscriptions
The CMA's investigation into the auto-renewing subscriptions and consumer terms of the main console platforms, which kicked off in 2019, remains ongoing.
A similar investigation into anti-virus software provider, Norton, recently ended with several undertakings being voluntarily offered by Norton regarding its auto-renewing subscriptions (including offering pro-rata refunds and setting up an automated refund system) which may indicate what's to come.
The outcome of this investigation is likely to have an impact on both how games businesses can offer subscriptions (and their popular in-game incarnation, the battle pass) and the surrounding consumer terms.
Looking even more broadly, last year the UK government was also consulting on reforming competition and consumer law policy, which could see enhanced powers for the CMA in future to deal with anti-consumer practices.
3. Information Commissioner's Office (ICO) review of the Children's Code
Hot off the implementation of the Children's Code, the UK's data protection authority has released the Commissioner's Opinion on age assurance under the Children's Code and also published a call for evidence on the use of age assurance technology. Both the Opinion and the call for evidence will be reviewed as part of its overall, planned review of the Children's Code in September 2022.
The ICO is particularly interested to see how the games industry implements the Children's Code
The ICO has not been shy about the fact that it is particularly interested to see how the games industry implements the Children's Code, so this is one that games businesses should be keeping an eye on moving into 2022 as industry practice continues to develop.
4. CMA's market study into mobile ecosystems
The CMA's market study into the mobile ecosystems operated by Apple and Google may also have a knock-on effect for the mobile games market. The CMA is investigating the two major mobile platforms in multiple areas, including the competition in the distribution of mobile apps and the role of Apple and Google in competition between app developers.
This market study is running alongside lawsuits and regulatory action against Apple and Google in countries such as the USA, Australia and South Korea.
5. Committee of Advertising Practice (CAP) in-app purchase guidance comes into force
In case you missed it, the CAP's guidance on the marketing of in-app purchases published back in September 2021 will end its six-month grace period at the back-end of March 2022.
At this point, the Advertising Standards Authority will decide whether to pursue cases formally against those in breach of the rules. The guidance includes topics such as the marketing of loot boxes, odd pricing and bundles, so is going to be relevant to many games businesses, particularly those operating a free-to-play model.
6. Progress of the Online Safety Bill
The UK's Online Safety Bill, which seeks to regulate online content, is likely to change heavily in the coming 12 months (in particular, which businesses it will actually apply to).
In mid-December, the Joint Committee tackled the Government's draft bill, releasing a nearly 200-page report of critique and recommendations. Suggestions included aligning the "likely to be accessed by children" test with that in the ICO's Children's Code, removing the three-tier categorisation of businesses and replacing it with a 'risk register' and introducing a legally binding code of practice around age assurance technology and governance.
This is a bill that games companies should continue to watch, as it is likely that it will have impact on areas such as user-generated content, chat moderation and age assurance.
Isabel Davies is an associate in the interactive entertainment team based in London at media, tech and IP law firm Wiggin LLP.