24 Apr 2009

Selling online games without classification: Will enforcement agencies continue to turn a blind eye?

by Gina Elliott, Danielle Briers

There are some simple things distributors, retailers and advertisers can do to protect themselves.

Game distributors, retailers and advertisers may be at risk of prosecution and heavy fines for selling popular online games such as World of Warcraft, Warhammer Online and Age of Conan without classification.

The gaming industry has long assumed that online multiplayer games like these are "unclassifiable" due to the inherent unpredictability of online play, and therefore do not require classification. This assumption has led to countless copies of online multiplayer games being sold without classification over the years, despite legislation which prohibits the sale, demonstration and advertising of unclassified games. The assumption is said to be based on an understanding between the industry and the Classification Board, with anecdotal evidence suggesting that distributors who have applied for classification of this type of game have been told by the Board that it wasn't required.

But this longstanding assumption may be under threat. When media reports shed light on the disconnect between the legislation and the industry's practices, representatives of the Commonwealth and New South Wales Attorneys-General firmly rejected the view that online multiplayer games were exempt from classification. A spokesman for the NSW Police Minister also weighed in with an invitation to the public to contact local police if they saw retailers selling games illegally.

So, will these fighting words lead to enforcement action, or will these games continue to be sold without incident, as they have for many years? What is the correct legal position on the classification of these games? And what can game distributors, retailers and advertisers do to protect their interests?

No specific exemption for online multiplayer games in the classification legislation

The classification of computer games in Australia is regulated jointly by the Commonwealth and the States and Territories. The Commonwealth classifies the games, while the States and Territories prosecute breaches of the classification system in their own jurisdictions.

There is nothing in the relevant legislation that obviously excludes online multiplayer games from the requirements of classification. Under the Classification (Publications, Films and Computer Games) Act 1995 (Cth) (the Commonwealth Act), all computer games, apart from business, accounting, professional, scientific and educational software, must be classified.

Scope for argument that online multiplayer games fall outside the definition of "computer game"

Paul Hunt, former Deputy Director of the Office of Film and Literature Classification, reportedly said that the Classification Board had not required classification of online multiplayer games because it did not consider them to be "computer games" as defined in the legislation. It was said that the product sold in stores did not contain a "computer game", but rather contained data which could be used to access an online game. Although this is arguable, it is by no means certain that the argument would succeed if the failure to classify these games were challenged in court. The definition of "computer game" is quite broad on its face, and you need look no further than the recent comments from the Attorneys-General's offices for the opposing view that online games are covered by that definition.

Even if the Classification Board considers that online multiplayer games do not require classification, there is still the risk that the State and Territory police, who are responsible for enforcing the classification laws, will take a different view and prosecute people who sell, demonstrate or advertise these games in apparent contravention of the legislation.

Significant penalties under State and Territory legislation for sale/demonstration/advertising of unclassified computer games

Legislation in each State and Territory creates various criminal offences involving the sale, public demonstration and advertising of unclassified computer games. The precise activities that are prohibited differ in each State/Territory. As an indication, offences created by the legislation include:

  • selling (or attempting to sell) an unclassified game;
  • public demonstration (or attempted public demonstration) of an unclassified game;
  • keeping an unclassified game where classified games are sold;
  • publishing (or attempting to publish) an advertisement for an unclassified game; and
  • possessing or copying an unclassified game with the intention of selling it.

Penalties also differ depending on the State or Territory. For example, in New South Wales, the penalty for selling or demonstrating an unclassified game is anywhere from $1,100 to $11,000 (and 12 months' prison) for individuals and $2,200 to $27,500 for corporations. In Victoria the maximum penalty is $27,220.80 or 2 years' prison. In Queensland, the equivalent offence extends to any attempt to sell or demonstrate an unclassified game, and the penalty ranges from $500 to $15,000.

This legislation potentially leaves not only game retailers (both in-store and online), but also distributors, advertising companies and advertising publishers vulnerable to prosecution and significant financial penalties. Take, for example, the offence of publishing an advertisement for an unclassified game. Whom would the authorities target? The Victorian and NSW legislation provides that, if the advertisement is published at the request of someone, the person who made the request is liable. So the retailer, distributor and perhaps even the advertising company are at risk in those jurisdictions, rather than the person who published the advertisement. In Queensland, there is no provision placing responsibility on the person who requested the advertisement, so the media company that published the advertisement may be at risk.

It is also important to note that "advertisement" is defined very broadly in the legislation, so that publication in Australia of any type of advertisement for an unclassified game - print, internet, cinema, radio, television, point-of-sale, etc - will be covered by the legislation.

Of course, it remains to be seen how active an approach the enforcement agencies take to prosecuting people for these offences. Given the widespread practice of selling these games without classification, and the suggestion that the Classification Board may have condoned this practice, the enforcement agencies may take a hands-off approach.

Nonetheless, the risk of prosecution remains, and should be taken particularly seriously in light of the recent media coverage, including the NSW Police Minister's invitation to the public to report any selling of games in breach of the classification laws. It seems that now is a good time for retailers, distributors and advertisers to consider their legal options, including the possibility of seeking an express exemption from the legislation (discussed below) or applying for classification of these games.

Express exemption may be sought, but this poses practical difficulties for organisations wanting national consistency

The State and Territory legislation generally allows people to apply in writing to have specific games exempted from the classification requirements by the Director of the Classification Board or the appropriate State/Territory Minister. Applying for such an exemption is one option for parties concerned about possible breaches of the legislation relating to online multiplayer games. However, due to subtle differences between the States and Territories and the discretionary nature of the exemption, there would be considerable difficulties in obtaining an exemption that covered all of an organisation's activities in all States and Territories. For example:

  • In each jurisdiction the Director or Minister (as the case may be) has the discretion to refuse to grant the exemption, make any exemption as broad or narrow as it wishes, and impose any conditions it deems appropriate.
  • The person with the power to grant the exemption differs between the jurisdictions. In New South Wales and Victoria the exemption must be granted by the Director of the Classification Board, in South Australia and the ACT it must be granted by the Minister, and in Western Australia, Tasmania and the Northern Territory it may be granted by either. So it is not a simple matter of applying to one person and getting an exemption that covers all States and Territories.
  • Unlike other States and Territories, in Queensland exemptions are only available for the demonstration of a game at a specified event, and for games intended to be used for a medical, educational or scientific purpose.

This makes it likely that any company seeking to protect its interests by applying for exemptions will end up with a complicated, inconsistent regime governing its ability to sell online multiplayer games across the country.

Applying for classification may be the best option

In light of this, the best course may be to make contact with the Classification Board regarding the classification of any online multiplayer games that are not yet classified. It seems that obtaining classification of these games from the Classification Board is the only way that distributors, retailers and advertisers can offer them for sale throughout the country with confidence that they are not breaching the classification laws. If the Classification Board is not willing to classify a particular game, the applicant could at least point to this fact, which may count in its favour (but would not constitute a complete defence) if it were ever prosecuted for breach of the laws.

Issues to remember in applying for classification

Given the time and effort involved in preparing an application, and the uncertainty as to whether the Classification Board is willing to consider these games for classification, it may be wise to contact the Board first and test the waters as to whether classification is required.

It is prudent to keep a detailed file note of all conversations with the Classification Board concerning your application, particularly any conversations in which you are told that the game does not require classification. Better yet, get the Board to confirm in writing anything it tells you about the classification of your game.

To minimise delay and inconvenience, make sure any application for classification complies with the stringent requirements of the Classification Board, available on its website.

If you think the game is likely to be rated G, PG or M, and someone in your organisation has completed the Authorised Assessor course offered by the Classification Board, that person may submit a detailed assessment and recommendation regarding the game's classification. This could be particularly useful when applying for classification of an online multiplayer game, given the inherent difficulties in classifying such a game - the Classification Board will likely be looking for as much information and guidance from the applicant as to the game's characteristics as possible

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.