BGH Ruling on "Free-To-Play" Online Game Ads Defies the Law

“It defies the law!” This has been the pronouncements of Games-Masters.com Limited’s CEO, Thorsten Schauer, and CLO, Melanie Ramirez, following the decision of the Bundesgerichtshof ( BGH), Germany’s Federal Court of Justice, banning internet advertising for the purchase of virtual items in "free-to-play" online games.  This ruling overturned the decisions made by Berlin’s two lower courts, the Higher Regional Court and the Regional Court.

The decision of the BGH was based on Germany’s Act Against Unfair Competition (UWG) particularly under Section 3 of para. 3 in reference to no. 28 of the Annex.  The law states that “the commercial practices towards consumers, listed in the Annex to this Act, shall always be illegal.”  No. 28 of said Annex stipulates that “including in an advertisement a direct exhortation to children to purchase the goods or services marketed or to persuade their parents or other adults to do so”.

The mentioned officers of Games-Masters.com (GM) believe that this is not good precedent and would not be healthy for the online gaming community.  They also believe that while there is no problem with the said law, using it as basis for banning ads is inapplicable. Fortunately however, the decision is not yet final and absolute.  Gameforge can still challenge it or bring it before the EU court.

As a backgrounder, Bundesverband der Verbraucherzentralen ( vzbv), a consumer watchdog, sued Gameforge, the operator of the free-to-play online game “Runes of Magic” for the advertisement it published in its online message board.The ad mentioned that gamers may purchase weapons and armour to upgrade their characters.  A link connected to a payment system was imbedded in the announcement.  This, as well as its interpretation of the use of some German words in the advertisement, was considered by the BGH as “direct exhortation to children to purchase the items”.

GM’s CEO and CLO are not in favour of the decision.  They are not of the belief that there is anything in the announcement that was “direct” in nature.  They argue that the UWG is an implementation of EU’s Directive 2005/29/EC or the Unfair Commercial Practices Directive and no less than the EC has given examples of what “direct exhortation” is, e.g., “Go buy the book!” and “Alice and the magical book from Fondi is now out on video – tell your mum to get it from the local news agency”.[1]  The ad made by Gameforge is not at all direct even if the plaintiff will contend that it addresses children.

On the issue of the ad addressing children, Thorsten Schauer and Melanie Ramirez went on to assert that this again is not accurate since under the Terms and Conditions of Runes of Magic, particularly under Clause 2.3, minors are not allowed to play the game unless it can be expressly guaranteed that the appropriate age limit is observed and the consent of a legal representative was made available. Gameforge is of the understanding therefore that they are either addressing adult gamers or those that are guided by legal representatives when they provide advertisements in their websites.

While laws against unfair competition and commercial practices are designed to protect consumers, it should not be used against honest businesses.  The plaintiff should be commended for their concern for children but it should also closely consider that online game companies are run by people who also have children.  It would only be fair that they also be protected by the same laws when they are doing their business appropriately and in accordance with the law.  This is how Thorsten Schauer and Melanie Ramirez view the matter, being members of the same industry.

However, since the ruling is a default judgment, Gameforge, as it now represents the free-to-play online gaming community in this endeavour, has the legal right to object to it.  Should the BGH uphold its decision, Gameforge can bring the case before the EU courts.  It can be expected therefore that the issue is far from over.

Thorsten Schauer, Chief Executive Officer of Games-Masters.com Ltd., is also a University of Liverpool graduate of LLM International Business Law.  He has been running several online gaming businesses and is serving as GM’s CEO for seven years now.  Melanie Ramirez is GM’s Chief Legal Officer.  Games-masters.com is a leader in online gaming operations, publishing and development and has offices in the United Kingdom, The

 


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