New principles call on game industry to be upfront on IAPs in children's games
The Office of Fair Trading has warned online and mobile developers and publishers they have two months "to get their house in order" following its investigation into in-app purchases.
The OFT has said game companies must now all be upfront about all the costs associated with a game, such as if they include microtransactions or whether they use in-game advertising.
It has also called on studios to clearly state whether any personal data will be shared with other parties for marketing purposes.
The new rules will mainly affect children's games, to which the original investigation into in-app purchases was targeted at.
The OFT stated that failure to comply with the new principles, to be enforced from April 1st, could result in enforcement action.
The OFT's findings claimed that nearly 90 per cent of children aged between seven and 15 had played online games in the past six months, with half of those paying to play those titles at least once.
To help parents understand in-app purchases and to avoid any surprises on their bills, the Office of Fair Trading has also published guidance for parents to help them know what to expect.
It suggests parents check the payment options settings on their device, and advises they can change these to require a password for each purchase, and calls on them to check whether a game contains IAPs or social elements on the app's description.
Previously, the use of IAPs has not always been explicitly mentioned in a game's description, with some companies claiming their title is "completely free", when there are in fact payment options. While there has not been a global uniform requirement to clearly state if microtransactions are present, Apple has previously attempted to avoid controversy by stating this itself. The same notification is not present on Google Play.
Parents have also been advised to play games themselves to understand what their children will experience, and be aware that such content could change through regular updates.
While the rules will only affect how games are advertised in the UK, the OFT claims it has worked closely with international partners to ensure new principles are "consistent with the laws of most key jurisdictions to help raise standards globally". It is not clear yet however how this will affect other countries, if at all, since they will not be bound by the OFT's new rules.
"Many children enjoy playing these types of games. This rapidly growing creative sector has also brought wider economic benefits," said OFT chief executive Clive Maxwell.
"The online and apps based games industry has already made significant improvements during our consultation process. But it still needs to do more to protect children and treat its customers fairly. Our principles make clear the type of practices that games makers and platform operators should avoid.
"Parents and carers have an important role to help protect their child and their bank balance. Our advice is that parents check their device settings, play their child's games themselves and read the game's description online. Parents will also be encouraged to report concerns to Citizens Advice."
CMA chief executive Alex Chisholm added: "Once the CMA acquires its powers in April 2014, we will pick up from where the OFT has left off. The CMA will continue to monitor the market to check whether the industry is complying with its legal obligations. Traders in the industry are therefore advised to satisfy themselves that they are in compliance with the Principles ahead of this next stage of the project. Failure to comply with the Principles could risk enforcement action."