Guidance

Lootboxes: Advice to the Gambling Commission from ABSG

ABSG has given advice to the Gambling Commission in regards to lootboxes. This advice outlines what lootboxes are, concerns around them, and how to protect consumers.

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Published
13 August 2021

Last updated
13 August 2021 - Changes

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Contents

• Lootboxes: Advice to the Gambling Commission from ABSG

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• Executive Summary
• Introduction
• Background
• Evidence of harm
• - Summary of key points
• - Links to current harmful behaviour
• - Links to future harmful gambling
• - High levels of unplanned expenditure
• Under-utilisation of existing consumer law
• International approaches
• Conclusions
• Annex A: Links to Recent Research with abstract summaries on key conclusions
• Annex B: Extract from ABSG advice (published July 2019)

Under-utilisation of existing consumer law

Existing consumer protection legislation is not being fully utilised to protect children and young people who make in-game purchases.

In 2011, the Office of Fair-Trading published principles on free to play games. They recommended that optional purchases in-games should not be offered and that information relating to costs should clearly displayed²⁹. The principles also specify that there should be no direct exhortation to children to buy advertised products, no payments taken from account owners without their consent and no exploiting of children’s inexperience.

The following textbox sets out consumer protects within EU law. We recommend that the Government are encouraged to review to what extent equivalent protections exist in UK law post-Brexit. If UK laws are reviewed in this area in the future, we also recommend that close attention is paid to online products such as lootboxes.

EU Consumer protections

Consumer protection is a harmonised matter across the EU – key principles are as follows:

• when dealing with consumers a business must ensure that they act fairly; they must provide accurate information and avoid business practices that are unfair, misleading, or aggressive. The Regulations prohibit 'misleading actions' and 'misleading omissions' that cause, or are likely to cause, the average consumer to take a 'transactional decision' they would not have taken otherwise. They apply to commercial practices relating to products (which includes goods, services, and digital content) before, during and after a contract is made
• whether a commercial practice breaches the general prohibition and the prohibitions relating to misleading and aggressive practices will be judged by reference to the ‘average consumer’, the ‘average member’ of a targeted group of consumers and the ‘average member’ of a vulnerable group of consumers (as appropriate). The concepts do not refer to actual consumers, and there is no requirement to show evidence of actual consumers being affected by an unfair commercial practice
• where a practice is directed to a particular group of consumers, the ‘average consumer’ refers to the average member of that group³⁰
• these Regulations also include specific banned practices that are always considered to be unfair and therefore are prohibited in all circumstances. These include: making a direct appeal to children to buy a product or to persuade their parents to buy a product for them (pester power)³¹.

References

²⁹ The OFT’s proposed Principles for online and app-based games (opens in a new tab) but the OFT did not start looking at free to play games until 2013, and there is no date on the published principles.

³⁰ Guidance on the Consumer Protection from Unfair Trading Regulations 2008, Office of Fair Trading, 2008

³¹ Consumer protection from unfair trading (opens in a new tab), , Business Companion, November 2020

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International approaches - Lootboxes: Advice to the Gambling Commission from ABSG

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Last updated: 13 August 2021

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