November 2022
Required Disclosure of the Prize-winning Odds of Opportunistic Products of Online Games (Taiwan)
November 2022
Oli Wong and Weke Chen
Since the prize-winning odds of opportunistic products or activities are one of the important pieces of information that affects consumers' transaction decisions and to implement the disclosure of gaming information and reduce consumer disputes caused by insufficient information, the Ministry of Economic Affairs of Taiwan (hereinafter, the “MOEA”) amended Point 6 of the Matters Which Shall Be Specified and Shall Not Be Specified in Standard Service Contract for Internet-Connected Gaming Services (hereinafter, the “Matters”) on the odds of opportunistic products or activities via the Jing-Gong-Zi No.11102026090 Announcement of August 10, 2022. The amended provisions will go into effect on January 1, 2023. These amendments are highlighted below:
(1) Definition of the prize-winning odds: The prize-winning odds refer to the odds of winning the prize after a game consumer pays for an opportunistic product or the odds of completing the additional conditions set in the activity.
(2) The scope of disclosure for the prize-winning odds: The disclosure scope of the prize-winning odds includes all the "directly or indirectly provided, partially or fully premium opportunistic products or activities." In other words, whenever a premium purchase is involved, the odds of winning a prize shall always be announced regardless of how the form of the opportunistic product or activity is converted and how many times it is converted.
(3) Disclosure method of the prize-winning odds: The prize-winning odds shall be recorded as a numerical percentage (%) and shall be stated regardless of the rarity of the opportunistic product or activity.
If the contract provided by a game operator does not comply with the provisions of the Matters, the competent authority may order the game operator to rectify it. While there is no rectification when the demanding rectification period dues, the competent authority may impose a fine of NT$30,000 to NT$300,000 in accordance with Article 56-1 of the Consumer Protection Act and may levy the fine continuously until the rectification is made.
In addition, the Taiwan Fair Trade Commission recently imposed a fine of $2 million on an online game operator for misrepresenting the odds of an opportunistic product, which constitutes a false advertisement under Article 21 of the Fair Trade Act. It was worth noting that it was the first case of opportunistic products in the relevant industry.[1]
With the prevalence of top-ups to claim loot boxes in online games among players in recent years, the prize-winning odds have become one of the most important factors for players in considering whether to pay for a game. Therefore, before the Matters come into effect, game operators should adjust the information about the opportunistic products in online games to comply with the regulations related to prize-winning odds and reduce the risk of the violation of the law.
[1] See the Gong-Chu-Zi No.111039 Disposition of June 10, 2022, of the Fair Trade Commission. Please also refer to the newsletter published by our firm in August, "The Fair Trade Commission of Taiwan Penalized a Gaming Operator’s Act of False Probability Claims of Opportunistic Goods."
Oli Wong and Weke Chen
Since the prize-winning odds of opportunistic products or activities are one of the important pieces of information that affects consumers' transaction decisions and to implement the disclosure of gaming information and reduce consumer disputes caused by insufficient information, the Ministry of Economic Affairs of Taiwan (hereinafter, the “MOEA”) amended Point 6 of the Matters Which Shall Be Specified and Shall Not Be Specified in Standard Service Contract for Internet-Connected Gaming Services (hereinafter, the “Matters”) on the odds of opportunistic products or activities via the Jing-Gong-Zi No.11102026090 Announcement of August 10, 2022. The amended provisions will go into effect on January 1, 2023. These amendments are highlighted below:
(1) Definition of the prize-winning odds: The prize-winning odds refer to the odds of winning the prize after a game consumer pays for an opportunistic product or the odds of completing the additional conditions set in the activity.
(2) The scope of disclosure for the prize-winning odds: The disclosure scope of the prize-winning odds includes all the "directly or indirectly provided, partially or fully premium opportunistic products or activities." In other words, whenever a premium purchase is involved, the odds of winning a prize shall always be announced regardless of how the form of the opportunistic product or activity is converted and how many times it is converted.
(3) Disclosure method of the prize-winning odds: The prize-winning odds shall be recorded as a numerical percentage (%) and shall be stated regardless of the rarity of the opportunistic product or activity.
If the contract provided by a game operator does not comply with the provisions of the Matters, the competent authority may order the game operator to rectify it. While there is no rectification when the demanding rectification period dues, the competent authority may impose a fine of NT$30,000 to NT$300,000 in accordance with Article 56-1 of the Consumer Protection Act and may levy the fine continuously until the rectification is made.
In addition, the Taiwan Fair Trade Commission recently imposed a fine of $2 million on an online game operator for misrepresenting the odds of an opportunistic product, which constitutes a false advertisement under Article 21 of the Fair Trade Act. It was worth noting that it was the first case of opportunistic products in the relevant industry.[1]
With the prevalence of top-ups to claim loot boxes in online games among players in recent years, the prize-winning odds have become one of the most important factors for players in considering whether to pay for a game. Therefore, before the Matters come into effect, game operators should adjust the information about the opportunistic products in online games to comply with the regulations related to prize-winning odds and reduce the risk of the violation of the law.
[1] See the Gong-Chu-Zi No.111039 Disposition of June 10, 2022, of the Fair Trade Commission. Please also refer to the newsletter published by our firm in August, "The Fair Trade Commission of Taiwan Penalized a Gaming Operator’s Act of False Probability Claims of Opportunistic Goods."
