Legal risk analysis of false advertising of online games

By Jeff Yang, Wang Jing & GH Law Firm
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The online gaming boom is partly fuelled by large-scale and intensive advertising. However, these fruitful gaming advertisement campaigns have also bred the problem of false advertising. In March 2020, the China Consumers Association required online game operators to operate with honesty and integrity, and ensure their gaming products were as good as advertised. With short video platforms thriving, however, deceptive gaming advertisements have become increasingly common. Many local consumer protection commissions have published cases of false gaming advertisements. As the gaming industry grows rapidly and creates new opportunities, compliance with advertising has become a vital part of promoting the healthy development of online games.

Forms of false advertising

Jeff Yang, Wang Jing & GH Law Firm
Jeff Yang
Director
Wang Jing & GH Law Firm

Gameplay and features are not as advertised. Article 4 of the Advertising Law provides that “advertisements shall not have any false or misleading content, nor defraud or mislead consumers. An advertiser shall be responsible for the veracity of advertising content”. To attract new subscribers, the game operator usually offers game props and other gaming service items as gifts. With the rise of short video platforms, livestreamers promote games by displaying game links in livestreaming or short videos and offer special benefits to the audience who have registered for game accounts. However, such promotional methods often trigger complaints from players who get into the game and only find that the specific service items are not available for free as advertised. Secondly, the subscribers may find the promised benefits of the game cancelled in the redemption phase, but the game operator neither indicates the time for redemption on the page of the advertisement, nor gives a clear notice of cancellation. For the above reasons, these circumstances may be defined as an act of false advertising.

The honours and scale of the game are inconsistent with reality. Article 28(1) of the Advertising Law provides that “any advertisement that defrauds or misleads consumers with any false or misleading content shall be a false advertisement”. A company that promoted its game as “a mobile game with 100 million players” and the “Game of the Year” was fined 1.5 times the amount it had paid for the advertisements, after it was found that the sales scale and honours of the game as touted in the video advertisements were fictitious.

The game is advertised with extreme terms. Article 9(1) of the Advertising Law provides that “an advertisement shall be prohibited from: … (3) using ‘national’, ‘highest’, ‘best’ or similar comparative words”. Some game operators use absolute terms in their advertisements. For example, some games have been subjected to administrative penalties for attracting buyers with such phrases as “record low (the lowest price ever)”. In such promotional events, especially when there is a special price description like the above-mentioned, the game operator may face the risk of non-compliance if it does not review all the previous promotional events and provides no factual grounds or reasonable explanation for such labelling as part of a “self-comparison” structure.

Compliance suggestions

Game advertising materials. Game operators should strengthen the compliance review of their advertising materials, checking for any false or misleading content and any risk of deceiving or misleading consumers. If advertising materials contain such expressions as “new users register to receive”, “login on specific dates to receive”, “receive rewards for consecutive logins” and “receive rewards for first-time recharge”, the availability of rewards varies significantly with the conditions, greatly affecting user acceptance of the service. Game operators should clearly state the conditions for receiving game props or services as gifts and disclose them prominently in the advertising material. Additionally, game operators can provide specific actions and statements from players to prove whether players have misconceptions based on advertising materials, thereby avoid being put in a passive position in potential legal disputes.

Game advertising phrases. Game operators should pay due attention to the illegality of using absolute terms. In addition to the word “best” and other expressions indicating the superlative degree that are clearly identified as absolute terms in advertising, phrases such as “the most unique” and “the hottest”, which cannot be objectively proven, also carry this risk. When advertising involves game operation data or mentions past honours, operators should ensure they keep relevant records of these honours and refrain from fabricating or exaggerating information in any form. Otherwise, the advertisement may be confirmed to be inconsistent with the reality of honours or sales. When using data, awards and similar content for promotional purposes, game operators should ensure they retain relevant evidence and clearly indicate the sources of data for traceability and verification. If the game wins any honour or award or any recognition from a specific organisation or receives a title, the game operator should indicate the awarding organisation, the date of the award and the award webpage address.

Probability of random draws in games. It’s important to ensure the accuracy of disclosed probabilities. Simply disclosing the probability of obtaining a certain category or tier of goods or rewards still carries legal risks. To avoid misleading advertising, the probability of obtaining a specific item or reward should be clearly disclosed. Information related to random draws should be genuine and effective, with relevant records kept for verification by relevant authorities.

Jeff Yang is a director at Wang Jing & GH Law Firm

Wang Jing & GH Law Firm14, 17/F, Central Tower
5 Xiancun Road, Zhujiang New Town
Tianhe District, Guangzhou 510623, China
Tel: +86 20 3564 1888
Fax: +86 20 3564 1899
E-mail: yj@wjngh.cn
www.wjngh.cn

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