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Germany's highest court bans ads for virtual items in online game – reasons for judgment available, but not final
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Germany's highest court bans ads for virtual items in online game – reasons for judgment available, but not final
by Konstantin Ewald on 01/08/14 11:01:00 am   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

The highest German civil court, the Federal Court of Justice (Bundesgerichtshof; "BGH"), has ordered Gameforge as the operator of the online fantasy game "Runes of Magic" to cease using certain language to advertise additional online content available for purchase. The contested wording included the sentence "Seize the advantageous opportunity and add that certain something to your armour & weapons". The plaintiff was a consumer watchdog organisation.

The BGH considered the language a direct exhortation to children to purchase the items, which is prohibited by unfair commercial practices legislation in the European Union.

The decision (docket no.: I ZR 34/12) was handed down and first reported in the summer, but the reasons were not provided until late December 2013. As it was a default judgment, it is not yet final and is being challenged by the operator of the game. And indeed, the decision is contradictory and not convincing.

What is it all about?

The games provider advertised on an online message board associated with the game, under the heading „Die Pimp-Woche“ (Literally, “the pimping week” – the English term “to pimp” is sometimes used in contemporary German in its slang meaning as “to embellish” or “to enhance”):

“Thousands of dangers are waiting for you and your character in the wide world of Taborea. Without the proper preparation, the next corner you round in that dungeon could be your last. This week again you have the opportunity to vamp up your character. Seize the advantageous opportunity and add that certain something to your armour & weapons. From Monday […] through Friday […], you have the opportunity of upgrading your character.”

The portion “upgrading your character” was linked to the item shop in which registered users could purchase virtual items for the game.

The court’s decision

The BGH saw this language as an illegal direct exhortation to children to buy the relevant items. The BGH’s position that the ad targeted children is essentially based on the following analysis:

The language of the ad made it clear that the invitation to make a purchase also targeted children because it addresses the audience with the German informal “you” (the German language has different words and grammatical constructions for “formal” and “informal” address, the latter being commonly used for family, close friends and children) and the use of words like “pimp” and “vamp up”, which it considers typical for children’s speech. The court also refers to "anglicisms", implicitly relying on the use of the English terms "pimp" and "dungeon" in the ad, which it considers typical of children's speech.

With its decision, the BGH takes a position opposite both lower courts that have heard the case: The Regional Court of Berlin had dismissed the claim based on the argument that the advertisement did not concern a specific product, which would be required for an “exhortation to purchase”. The Higher Regional Court had agreed with this analysis and rejected the appeal.

Legal background

The BGH allowed a further appeal and found the advertisement to be an illegal commercial practice under German Unfair Competition legislation. The law is based on the EU Unfair Commercial Practices Directive (Directive 2005/29/EC of May 11, 2005), which means that similar statutes exist throughout the European Union. Therefore this decision could also influence the interpretation of the laws in other European jurisdictions.

Under this legislation, it is an illegal commercial practice to include in an advertisement a direct exhortation to children to buy advertised products or services or persuade their parents to do so.

The term “Child” is not defined either in the Germanstatute or in the EU directive. It is not entirely clear if it refers to all minors, or only minors below the age of 14 years. However, it appears that the majority legal opinion, based on other EU legislation, is that the cut-off age is 14 years. In its decision, the BGH brushes aside this problem and states that the ad in any event targets minors under the age of 14 because it uses the informal "you", typical children's vocabulary, and "common anglicisms".

The reasons for judgment are contradictory insofar as they also explicitly say that the use of the informal "you" nowadays is not uncommon in ads addressing adults; the same is obviously true of English language words and advertising claims and slogans. This leaves only the allegedly "typical" children's speech – but the court's reasons are very vague on what words precisely it considers to fall into this category, making the decision ultimately unconvincing and unhelpful.

Under the EU directive, an "exhortation to buy" must include the characteristics of the product and the price. In this case, the advertised items were not even specifically identified. However, the BGH considers that the hyperlink to the online store is sufficient, as consumers were used to the mechanism of clicking links to retrieve additional information on websites. The court therefore saw the ad and the online store site it linked to (and which obviously stated product characteristics and prices) as one unit.

Game over for Freemium offers?

After the decision was initially reported, many commentators took the position that this BGH verdict threatened the entire “free-to-play” model in Germany. As the last few months have shown, we are not there yet. However, the written reasons for judgment have not significantly clarified the law with regards to permissible advertising.

It is important to note that the decision is only a default judgment, and the operator of the game is challenging it – now that it actually knows the precise reasons. This right of objection enables the game operator to make further legal submissions and obliges the court to review its decision.

It is by no means excluded that the BGH changes its stance during the objection procedure or that it asks the ECJ for a common interpretation of the directive.

What does the decision mean for Freemium offers, children’s games and children’s apps?

It can be expected that consumer watchdog groups and potentially also competitors will take an even closer look at advertising language in or with regards to online games. Furthermore, challenges to terms and conditions and privacy policies have been on consumer watchdogs’ agendas for quite some time now. This does not only apply to browser and client based games, but also to mobile apps.

Game operators active in the EU, and particularly in Germany, should therefore closely monitor the further legal developments in this area. As a consequence of the BGH decision, even greater care should be exercised in making advertising language legally compliant. Direct purchase invitations to children should be strictly avoided. Therefore, while the invitation “Get this sword for only 2.99 Euros!” is a no-go, a wording like “Wouldn’t it be great to enhance your weapons?” should be less problematic.

Checklist:

  • Advertisements within or with regards to a game and the embedding of advertisements as such should be legally vetted and, when in doubt, worded more carefully (indirectly);
  • Where terms and conditions state a minimum age, it might be argued that ads for in-game items cannot be targeted at younger individuals;
  • Terms and conditions (and privacy policies) need to be adapted to German law. Merely translating “universal” terms is not a solution.

A more detailled analysis of the decision is available here: http://bit.ly/1lPrLTV

co-author: Felix Hilgert, LL.M., Osborne Clarke


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Comments


Joel Nystrom
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I understand that directly exhorting a purchase to a child is illegal, but I find it problematic that it's more OK to be vague about what you are talking about, than to be upfront about and just say "Buy X for Y"

Nooh Ha
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Their reasoning for believing that the RoM ad is aimed at kids is utterly laughable and surely would not survive long in any sensible court and with a half decent defence.

Daniel Boy
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As a German I think the verdict is spot on. The German and EU citizens decided through democratic process that minors should be no target group for companies. Gameforge is advertising Runes of Magic to minors. Don't bs yourself. Compare its adverts to eg WoW's. Language is part of that. All of the social/mobile games developers that had any knowledge of German and EU advertisement law told me that this advertisement style was legally not sustainable. And I'm very happy about the possible chilling effect. The problematic part of the verdict is its reliance on pseudo-objectification of language. I could swear that it was more a "I know pornography when I see it" and then ex post justification. Oh btw.: the result is not a 1.2 Billion verdict but a "no Joe Camel in my jurisdiction".

tldr: The verdict is just, the ruling problematic.

Nooh Ha
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Don't get me wrong: I approve of the idea of making it illegal to exhort minors into paying (although I am guessing it is usually the parents that do the paying not the minors). I am simply pointing out that the utterly flimsy argument that this was an advert that was aimed explicitly at children is laughable and would not survive a rigorous test in most courts around the world. Now if that ad had been run on a kids' TV channel or web site, they would have a case...

Torben Ratzlaff
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The thing the article misses to point out is that you were able to purchase the upgrade via SMS. This could be seen as another hint that the advertisement was for children.

Anyway, as a German I have to say that the language was not clearly targeted to children, as this language is used at many places in the internet that are clearly targeted to adults. So to me it seems like the judges live a little bit in the past.

Andreas Ahlborn
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Anyone who followed the controversy over the past months won´t be surprised. This verdict was long overdue and we will hopefully see a rapid decilne in money-extorting practices in games targeted at underaged.

For anyone new to the subject: Start with this excellent blog-entry:
http://www.gamasutra.com/blogs/RaminShokrizade/20130620/194429/Mo
netizing_Children.php

Ian Griffiths
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Which games engage in "money-extorting" practices? Exhorting money is an illegal act that involves using coercion - intimidation or threats. I fail to see which of the mainstream free-to-play games around today are using threats or intimidation to encourage the purchase of virtual items.

Kristopher Horton
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I think the theory here, is that the game is claiming that if you don't buy this thing, you'll lose the progress you've made in the game. That sounds like a threat. It's kind of a terrible threat, since they're basically saying if you don't pay us you can't keep playing this voluntary game. EULA's used to protect developers from this sort of stuff, but most mobile games don't ask for that anymore.

Nooh Ha
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How is that different to a freemium subscription game like Moshi or Club Penguin? If you don't keep paying our subscription fee you will lose access to the following features...

Robert Crouch
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Exhorting and Extorting are different words. Extortion is an illegal act. Exhorting is encouraging someone to do something.

Josh ua
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How is advertising sales inside games much different from advertising to kids on TV during their favorite cartoon? Both situations should require an adult to give them money, or access to their own money to get that items that is advertised towards them.

Christian Nutt
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It's worth noting that in the US, it's illegal to advertise the toy during the cartoon the toy is for =)

Ian Griffiths
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I can just hear the anti-monetization commentators rubbing their hands with glee.

I am not German but there seems to be some vagueness around these rules to the point where they are not easy to adhere to. There appears to be a fine line between informing the player of new content and being accused of trying to sell that content.

I think this case is utterly absurd as the promotion didn't seem to be coercive or exhorting. The ruling seems to be somewhat arbitrary based on a given interpretation of German language. I think this is the nanny-state trying to impose rules using the age-old 'think of the children' defence.

Eric Salmon
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To clarify, extortion/coercion is different than exhortation.

Extortion:the practice of obtaining something, esp. money, through force or threats.
Exhortation: an address or communication emphatically urging someone to do something.

The latter is banned when targeted to children (which I assume means minors under 18) in the EU. That is, you cannot attempt to persuade minors to buy (or convince their parents to buy) anything. Even with the English translation, it does seem targeted at the 12-18 age group to me.

The distinction between formal and informal has kind of a strange history for English, so it's hard for native English speakers to really understand. For example, "thee" and "thou" were originally informal, but their use became so offensive (essentially like the modern, perjorative use of "boy" and "girl") that they dropped out of the language entirely. They remain primarily in religious texts, so now "thee" and "thou" ironically seem more formal than "you" (especially ironic because in the King James version of the bible the use of "thee" and "thou" in reference to God were meant to convey a familiar, friendly God while today it does the opposite!)

Anyway, basically the court is saying you wouldn't talk to adults like that, and it seems most native German speakers agree. Something I think they may have failed to consider, though, is that you hardly ever see such formality on the internet--and this was a post on an internet message board which is, I assume, for a close-knit community of fans. I'd love to hear from some native German speakers on whether they would typically use formal pronouns in that context, as I find it unlikely.

Felix Hilgert
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Excellent linguistic explanation both on extortion/exhortation and the distinction between formal and informal in German - thank you!

Two comments though:

Firstly, it is not entirely clear what a "child" in the legal sense is for the purpose of the applicable statute. Under German national law, we have a distinction between "children" (unter 14) and "youth" (over 14 but under 18). Some EU legislation makes the same distinction, but the particular directive concerned here contains no definition. The national courts in the EU have no authority to make a final determination on the correct interpretation of an EU statute. In order to avoid having to put the question to the Court of Justice of the European Union, the German court simply said that the distinction "children" vs. "youth" did not matter because it thought the ad targeted minors under 14.

Secondly, I wouldn't say "most native German speakers agree" that you would not talk to adults in this way. In fact, in online communities and even in offline advertising, adults talk to each other like that all the time. You really get the impression that the judges confuse the issues of "how do contemporary online ads address adults" and "how should contemporary ads address adults". From a legal point of view, only the former is relevant.

Eric Salmon
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Agreed, thanks for the clarification!

R. Hunter Gough
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"the use of words like “pimp” and “vamp up”, which it considers typical for children’s speech"

it's a hard time to be a parent.


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