Three not-so-randomised rulings from the ASA

On 20 March 2024, the Advertising Standards Authority (“ASA”) upheld complaints against three separate social media ads for online games that failed to disclose the inclusion of loot boxes.

All three complaints were made by Leon Y. Xiao, a PHD Fellow at the IT University of Copenhagen, after he published a report in January 2024 which highlighted that 93% of games that contained loot boxes did not disclose these in their social media ads, therefore failing to comply with CAP Guidance on loot boxes.

The ASA examined all three ads and upheld that each ad had breached rules 3.1 and 3.3 of the Non-broadcast Advertising and Direct & Promotional Marketing (CAP) Code on misleading advertising.

In each case the ASA outlined that the items supplied in a loot box were based on chance, as the consumer did not know what items they would receive in their box until after the transaction. CAP Guidance states that the presence of random-item purchasing (loot boxes), is material to a consumer’s decision to purchase or download a game, especially for those with specific vulnerabilities. In each ad it should therefore have been made clear that the game contained in-game purchasing and loot boxes.

As noted in our previous Law-Now article here, the position in the UK remains (for now) that loot boxes will not be regulated under the Gambling Act 2005. These rulings may turn the spotlight back onto loot boxes, prompting questions of whether the current industry-led approach is working in favour of further legislative intervention. 

The nuance of each ruling is explored below:

ASA Ruling on Jagex Ltd

A paid-for Facebook ad for RuneScape contained a button labelled “Play Game”, which linked to a website landing page for the game. RuneScape contained loot boxes. The loot boxes were presented in the form of treasure chests.

Jagex Ltd made the following arguments:

• The paid-for Facebook ad was constrained by time and space. Therefore, measures were taken to ensure that consumers had all the relevant information about the game by other methods, before making the decision to download and play the game. Jagex emphasised that the landing page flagged the presence of in-game purchases and loot boxes in several areas, including:
  • in the footer where PEGI labels (Pan-European Game Information – an age classification for video games which also indicates if the game contains in-game purchases) were displayed, including the label for in-game purchases and text stated, “In-game Purchases (Includes Random Items)”.
  • a link to the “home page”, which explained the mechanics of the game and included the same PEGI labels as at the footer.
  • a link to the terms and conditions, which included information about virtual currencies and mini game credits.
• Jagex submitted that upon the download of the game, similar PEGI information was available under the character selection drop-down menu.
• Jagex also referred to the Consumer Protection from Unfair Trading Regulations 2008 and CAP Guidance, which stated that information about loot boxes is material to the decision to purchase or download a game. Jagex argued that the transactional decision was the decision to purchase or download RuneScape. Importantly, RuneScape could not be downloaded from the ad itself and therefore the relevant information was disclosed prior to that decision being made.

The complaint was upheld by the ASA for the following reasons, amongst others:

• While acknowledging that the presence of loot boxes was disclosed on the landing page, the ad itself did not include information about the presence of loot boxes.
• Transactional decisions encompass a wide range of decisions made by the consumer in relation to a product and their decision of whether to make a purchase. The decision to click the button labelled “Play Game” on the ad was a transactional decision in relation to downloading the game.
• The ASA reviewed the Facebook paid-for ad features which allowed for 125 characters in the primary text field, 40 characters in the headline field and 25 characters in the description field. The ASA considered these character allowances were not limiting and did not prevent the text “In-game Purchases (Includes Random Items)” from appearing in the ad.

ASA Ruling on Miniclip (UK) Ltd

A paid-for Facebook ad for 8 Ball Pool featured various scenes of gameplay and on-screen text which stated “PLAY FREE NOW”. Ball Pool contained loot boxes, such as ‘golden spins’. The ad included a link from which the game could be downloaded.

Miniclip (UK) Ltd argued that material information had not been omitted from the ad because the game did not require users to make a purchase in order to play and progress.

The complaint was upheld by the ASA because the ad for 8 Ball Pool did not contain any information to indicate to consumers that the game contained in-game purchases, including loot boxes. The ASA determined that consumers would not understand from the ad that the game contained loot boxes.

ASA Ruling on Electronic Arts Ltd t/a EA

Two paid-for Facebook ads for Golf Clash, a mobile app game, contained loot boxes in the form of chests. These items were available to purchase in-game, as well as through the webstore. The ads were as follows:

1. The first ad featured on-screen text that stated “5% EXTRA BALLS AND GEMS THROUGH PURCHASES”, “DAILY LOG IN BONUS” and “SIGN UP TO OUR NEWSLETTER FOR 500 GEMS”.
2. The second ad featured text which stated, “STARTS ON 21 AUGUST 2023”. The caption stated, “When reaching 'Gold Prestige', convert all leftover balls into 'Generation Tokens'”.

EA made the following arguments:

• The ads were mistakenly published without the prescribed disclosure due to human-error.
• They had a company policy which required paid ads for games that included loot boxes to contain the text “Includes optional in-game purchases (includes random items)” prominently within the ad.

The complaint was upheld by the ASA because the ads did not make clear that the webstore included loot boxes and it was not made clear that the game included in-game purchases or loot boxes. The ASA acknowledged that the ad had been published by human error, but otherwise did not give any credit to the argument.

Comment

The following points can be taken away from these rulings:

1. An ad for a game that utilises loot boxes must disclose the presence of the loot box directly in the ad, regardless of the space and time that the ad platforms afford to the ad;
2. It is not sufficient to only disclose the presence of loot boxes in the game’s landing page or home page, even if the user is directed to these pages before they can download the game;
3. Loot boxes still need to be disclosed in the ad, even if a consumer is not required to purchase them to play the game;
4. Transactional decisions encompass a wide range of decisions made by the consumer in relation to a product. A decision to click a button labelled “Play Game” on the ad would be such a transactional decision for which the consumer should be provided with material information, which includes the presence of loot boxes; and
5. The ASA will not afford lenience if an ad was published by human error, even if there are internal policies in place which, if followed, would comply with CAP.

Last year, as noted in our previous Law Now article here, the Department for Culture, Media and Sport (“DCMS”) welcomed guidance published by the games industry trade body, UK Interactive Entertainment (“Ukie”), that was set to implement industry-led protections for loot boxes over adopting new legislation. A core focus of the 11 principles developed by Ukie was to improve protections for children and vulnerable adults in respect of loot boxes and notably, Electronic Arts (EA) and Jagex are members.

The DCMS stated that it would monitor the industry-led measures and would consider whether further work is needed. These rulings have already prompted questions of whether an industry-led approach to regulating loot boxes is indeed operating as intended, or whether more intervention is required.

Co-authored by Catherine Travers, trainee solicitor.