Oral evidence: Immersive and addictive technologies, HC 1846

Oral evidence, 2 July 2019.

Witness

Margot James, Minister for Digital and the Creative Industries.

Chair

Thank you for joining us this morning for the second panel on this morning’s evidence session. Again, we are continuing our questions as part of our inquiry into addictive and immersive technologies. As you know, the Committee looked at a number of the issues that are associated with the Online Harms White Paper and, in particular, the obligations of social media companies towards their users. We agree that the companies have a duty of care to the people that use their services. During the course of this inquiry we have started to look at the scope of that duty of care outside of purely social media companies, looking at other businesses that have developed a large platform and content that people engage with, including the bigger games companies. I want to ask whether the Department believes that companies like Epic, EA and King, which make large, very popular video games, should consider their practices to be in scope of the Online Harms White Paper and, indeed, that their businesses may be businesses that a future regulator takes an interest in in terms of how they meet their duty of care obligations to their customers.

Margot James

Thank you very much for inviting me here this morning. In answer to your first question, we have just completed the consultation on the Online Harms White Paper. Over the summer and early autumn my Department will be reviewing all the responses that we have had and will be developing the final Government response prior to introducing legislation in the next session. It is probably too soon to be definitive about exactly which companies will and will not be in scope of the Online Harms White Paper and subsequent legislation. However, we have purposely drawn the net quite wide in the development of the White Paper because we would not want the harms that are given a lot of airtime in the media and associated with some of the big social media platforms to be the only ones that we would be seeking to regulate. There is no reason why companies with huge numbers of people active on their sites, like games companies, would not be in the scope.

Chair

Do you think the scope could be based on active user base as a number rather than just particular media or the type of online company you are? In Germany I think the enforcement of hate speech law is based on a threshold of the number of active users, and if you are above that threshold you are in scope for enforcement action. Do you think we may see something similar here with the online harms legislation?

Margot James

I would not want to repeat what I have just said in terms of the stage we are at, and it is not possible at the moment to be definitive. Such a threshold is one way of assessing what is in and what is out of scope, but only one. If one were to apply that in the context in which it is applied in Germany, one of course would leave out of scope potentially some sites with smaller user bases that could be doing more harm, albeit to fewer numbers of people, than a larger user base with appropriate controls and safeguards. We have to bear all those things in mind before we come down definitively on how to assess which companies are in scope and which are not.

Chair

From what you have said, it sounds like it could be the role of a regulator in that case to make an assessment based on a scale of harm and risk and then to decide what organisations are considered to be within the scope of its powers or not based on that risk assessment.

Margot James

That sounds a more likely route forward. It also underlines the importance of the regulator having the freedom to assess things from year to year because new ways of using the internet and social media platforms will emerge over time and it is very important that the regulator has the space to keep abreast of technical developments.

Chair

Would it be fair to say that final decisions have not been made and things have not been ruled in and have not been ruled out either? We were discussing with some of the video games companies, in particular EA, about FIFA, where there is both a voice and a text-based mechanism designed within the game to help players talk to each other while they are playing. That could also be used to share harmful content or for cyberbullying or something similar. From what you are saying, it would sound like that sort of activity could well fall within the scope of online harm if the regulator defined it as such.

Margot James

That would be a logical assessment, yes.

Chair

We talked in an earlier session with Elizabeth Denham just before you joined us about the age-appropriate design code. She raised in particular that she felt the concerns raised by the News Media Association about the age-appropriate design code were not warranted. She did not see that the level of risk associated with younger people accessing news websites and news information would create problems under that design code. News Media also raised concerns about online harms and whether journalistic content could fall foul of the online harms regulations as well. Again, while I accept you are still assessing the results of the consultation, I wondered if there is anything you could say about some of the wider concerns that have been raised about the unintended consequences of what is in the White Paper. Are those concerns founded? Do you feel you can reassure people there? Do you feel that news websites should come under the scope of online harm just as much as other platforms do?

Margot James

Underlying your question is a concern about the role of regulation in respect of free speech and freedom of expression. We are in the Department very concerned to make sure the harms we are seeking to address through the legislation do not inhibit the freedom of expression. Of course, we are aware that that can be quite a difficult line to draw depending on the context of whatever is expressed online. At the moment, my Secretary of State has said that he does not envisage news channels and news websites being in scope. During some of the consultation I undertook while the White Paper was being developed, I was interested to hear from a representative of the National Union of Journalists, who shared some research with me about the scale of abuse in the comment sections underneath editorial. What was interesting to me about what she shared was that there was an assessment done based on the gender of journalists that found that the vast majority of abusive comment was directed at female journalists. That did concern me because I have had a particular interest in the impact of abuse and harassment on women in public life, be they politicians or journalists. I thought that was quite relevant, but that might be a digression in the central purpose of your question. I would like to return to the fact that we are very sensitive to the need to protect freedom of expression and that is a driving purpose behind what we are doing with the Online Harms White Paper.

Chair

One of distinctions that has been drawn is between the role of the oversight of user-generated content and the responsibilities platforms have to content they do not necessarily create themselves but nevertheless facilitate the distribution of. Is there a distinction that can be made between a registered organisation or company like a news organisation, for which there are existing complaints procedures and mechanisms and existing lines of redress, versus what might be created by an organisation or an individual where there are no such possibilities in place and, therefore, the only arbiter of what they do or do not do online is whether the platform allows it? Is that a distinction you would draw in looking at the way the online harms recommendations could be enforced?

Margot James

That would be a reasonable distinction to draw, yes. The best platforms are moderated in terms of news organisations, but when you are talking about a global social media platform and the sheer volume of content that is uploaded every second of the day, it creates a very different challenge and one that would be more into the scope of what we are discussing.

Chair

We have received evidence during this recent inquiry from organisations that are involved in content moderation of designed technologies to facilitate that and identify harmful content in real time. Do you believe there are technologies out there that the big social media platforms could be using now to facilitate the work of moderating and removing harmful commentary and content?

Margot James

I think there are technologies that they are already using. Of the videos taken down by YouTube, for example, approximately 75% are identified and removed by artificial intelligence. The same would probably go for several other large platforms. There are technologies already in existence and they will become more and more important, particularly where encrypted or private parts of the internet are concerned. They will have a particular role to play in those environments. I think there will undoubtedly be emerging technologies—you have heard from the proponents of them or the developers of them during this inquiry—that will be an opportunity for platforms in the future to deploy, but the technologies have to be tested and assessed thoroughly before they are let loose across a large platform. We cannot expect that just because a technology is emerging, it is automatically into use straight away.

Chair

There has been a lot of focus on the Christchurch terror attack and the way footage of that was streamed live on Facebook and then shared, principally through Facebook and YouTube, around the world. Are you content that the companies did all they could and do you think we should expect them to do better in the future if there was a similar attack?

Margot James

We can expect them to do better in the future if there was a similar attack simply because it has happened once and there was such a focus on it. Law has been changed because of it in some countries. Clearly, we would expect companies now to have learned from that awful tragedy and its implications for social media. I would expect them to be putting in place, if they have not already, some protective measures. Do I think they should have done more at that point? From what I read, some platforms like Facebook were engaged in the automatic removal of hundreds of thousands of attempted uploads of the terrible video footage. Clearly, they did not do enough, but whether they could have done in that scenario with an event that was unfolding in real time I do not have the expertise to necessarily comment on. They did quite a lot.

Chair

Isn’t the problem here that we just do not know? We do not have any way of assessing whether they did enough or not.

Margot James

In the absence of proper regulation, I would concur with you. Fast-forwarding to the time when we have our online harms regulator in place, it will have the powers to investigate and to call companies to account for those companies’ duty of care and how effectively they are deploying that duty of care. If there was a freak event in the future that resulted in an extraordinary set of circumstances emerging online, then it would be quite within the remit of that regulator, I am sure, to zone in on that particularly egregious example and scrutinise it.

Chair

You would expect, after a situation like that, a regulator would go in and audit a company to see how effectively it had responded?

Margot James

I think it would provide a tragic but good example of what we could expect in the future, yes.

Chair

Just finally from me, you said earlier—as the Secretary of State said when he came to give evidence—that the Department had put in a bid for legislation in the next session of Parliament to deliver the Online Harms White Paper and legislation. We do not know when the next session of Parliament will start. Will the Department be ready at that point to have a Bill ready for the Queen’s Speech if the next session started later this year?

Margot James

The Department would be ready with a synopsis in order to guarantee a place in the Queen’s Speech, whenever that might come. The actual drafting of the Bill and legislation will take longer, but there is no reason that should not be done concurrently with the publication of the final response to the White Paper consultation, which we expect to be before the year end.

Chair

Would the Department envisage a process of prelegislative scrutiny before the final Bill is published?

Margot James

That is a decision that will take place later and it would be premature to comment. We have discussed this and I will share with you what we have discussed. On the positive side for prelegislative scrutiny, there is the undoubted benefit of the scrutiny. For Bills that have particularly House of Lords and House of Commons membership of a prelegislative scrutiny community, the legislation can undoubtedly be improved. But it will delay the introduction of it and, as it is both important and urgent, there is a tension there. It will be very much dependent on the parliamentary timetable of the next session as to whether time is permitted for that part of the process or not.

Chair

With that in mind, has the Department considered whether it would be sensible to maybe introduce these measures as a series of Bills rather than as one big Bill? There may be some things that are relatively simple and clear to act on. We would probably contend that some of the changes in electoral law, which I appreciate are Cabinet Office rather than DCMS, could fall into that category. There might be other aspects of it that are more complex and a bit of delay to get them right might be a sensible approach.

Margot James

That is certainly worth considering. We want to get as much as we can in terms of the final scope of the online harms regulation into one Bill. You are quite right that there are elements that might be possible to do sooner, although we want to get this done as soon as practically possible, and there will be elements whose natural place is perhaps in another remit. One could not rule your approach out.

Brendan O'Hara

You may have seen a couple of weeks ago that EA and Epic Games came before the Committee to talk about loot boxes or, as EA rather bizarrely called them, “surprise mechanics”. Since they appeared before the Committee, certainly I—and I am sure other members of the Committee—have had loads of gamers writing to me about loot boxes. Overwhelmingly, the opinion has been that there is very little difference between loot boxes and gambling. A number of our European colleagues, notably the Netherlands and Belgium, have taken action. Do you think the UK regulatory framework needs to catch up and recognise that loot boxes are in fact gambling?

Margot James

There are a number of assumptions I have heard while listening to your question that I would not necessarily agree with. For a start, a number of European countries have, as you say, intervened by defining this aspect of gaming as gambling, but then their offline gambling laws are different to ours as well. You have to see their actions in a wider context. In the UK, not exclusively but a central part of our gambling laws revolves around whether something is a game of pure chance. The fact that other European countries have taken action is much more to do with the enforcement of their offline gambling laws online, and our gambling laws are different. I would also contest the assumption that loot boxes are gambling. Not all the evidence I have read from your Committee’s hearings would support that assumption either. Loot boxes are a means of people purchasing items, "skins" as they are called, to enhance their gaming experience, not through an expectation of an additional financial reward. Also, importantly, they cannot be traded offline for money. There are big differences and it is not true to say that loot boxes are gambling.

Brendan O'Hara

You have no concerns about loot boxes?

Margot James

I did not say that.

Brendan O'Hara

What concerns do you have about loot boxes?

Margot James

I would be concerned if evidence was presented to me that loot boxes are a gateway to problem gambling. I would be concerned by that. With the gaming community, you are talking about large numbers of young people, but by no means exclusively young, of course. Gaming is a pleasure that is pursued by all age groups. But with particular reference to young people, we have to be vigilant. If evidence does emerge that loot boxes can be a gateway to problem gambling, then we need to take that seriously and we need to take some action. But the evidence is not there yet. There are not many studies. That is not to say that we should not be initiating more research. I do not want to give you the impression that I fall back on the fact that there is not much evidence and, therefore, there is no problem. I do not think that, but you need the evidence as a justification for taking action, particularly if you are talking about regulation.

Brendan O'Hara

You will be aware of the work of Dr David Zendle, who has looked into this quite extensively. He says that loot boxes do act as a gateway into problem gambling, particularly among the young. Are you or your Department doing anything in terms of looking into at least the potential harms of loot boxes or are you waiting for something to happen before you act?

Margot James

No. We are looking at this in the round and your inquiry is extremely helpful to us as we deliberate on what, if any, action is needed. You mentioned Professor Zendle. I think that he would acknowledge that even his work is correlational and that we must be careful. We cannot necessarily assume that because there is a correlation between A and B, there is a causal link. Those two modes of research are different and we should respect that.

Brendan O'Hara

Are you or your Department talking to the Gambling Commission about loot boxes?

Margot James

Yes. My Department regulates gambling as well and the Gambling Commission is a very important body, regulating that industry, which comes under my Department. There is a dialogue between the two.

Brendan O'Hara

The Gambling Commission acknowledged that loot boxes bear a close resemblance to the playing of a game of chance and the playing of a game of chance for prizes or prize money is gambling under UK law. Forgive me, but it does seem that your Department is being rather complacent in this matter. We are getting lots of evidence from gamers and from professionals saying that this is a problem, but it would appear that you are waiting for something to happen before actually tackling it.

Margot James

You did acknowledge and you used the term “close resemblance”. That is probably where we are at. We are looking at links. We are looking at evidence that is emerging. It is quite a young area of research. We could discuss why there has not been more research, but we are not complacent. We are looking at this very closely. As I said, your inquiry is informing the debate that goes on with my Department and in our relations with the industry. We are far from complacent, I can assure you. It is important that before regulation and action of that nature is attempted we get a better understanding of the root causes of the sorts of problems you are alluding to. If we are talking about problem gambling, that can at its worst become an addiction. But by treating one aspect of addiction—namely whether you are addicted to loot boxes, gaming, alcohol or whatever it is—if you are going to treat only the actual symptom, you may well be missing an important part of the underlying problem driving that behaviour. It is important that we do not just sit back and wait for evidence but that we lean forward and look for evidence but are dispassionate and objective. That is important.

Paul Farrelly

Just one supplementary on loot boxes and the current position. You mentioned the different approach taken by regulators in Belgium and the Netherlands. You said that their offline gambling regulations are different. Can you tell us how?

Margot James

It has to do with the role of chance and the monetisation of it. I would have to—

Paul Farrelly

That is all very general.

Margot James

Yes, it is general because my knowledge of it is general. If you are questioning me about gaming, I can be specific. If you are questioning me about gambling per se, I might have to write to you because that is not my area of close responsibility. But I would be glad to write to you because it is very important.

Paul Farrelly

I would be grateful because you were quite categoric—

Margot James

Yes, I can be categoric.

Paul Farrelly

—in answer but very general in the categorisation.

Margot James

Yes. In terms of Belgium, it is my understanding that there does not have to be the role of chance in the definition of what constitutes gambling offline, as there does in the UK. That is my understanding.

Paul Farrelly

Perhaps you can write to us with that.

Margot James

I will write with more details to the Chair, but that is an important distinction between the UK law on gambling and some other countries within Europe.

Paul Farrelly

Could you spell out your understanding?

Margot James

I certainly will. I will go into some detail in my letter to the Chair.

Paul Farrelly

In essence, we are all playing catch-up here. Not a single parent, I imagine, who has been frustrated about how much time their children have been online would say that there is not potentially a problem, although you have to take it all in the round. What we call some people’s addictions our children might call football, rugby, sport or books an addiction. They are just doing something different. One of the things you have just alluded to is that before you take a position on a move by the Government or the Gambling Commission in respect of these loot boxes or other items that cost money as well as carry a compulsion, you have to decide whether that is proportionate and it is very difficult to do that without evidence. You were saying that on the one hand we cannot be complacent, but you kept referring to evidence emerging. The word “emerging” is a complacent word. What are the Government doing to try to play catch-up and address the issue as to whether there is a problem that needs to be tackled?

Margot James

First of all, I was answering questions that were quite specifically about loot boxes. You have widened the topic to include the time spent and the elements of compulsion, about overall time spent—

Paul Farrelly

It is a potentially connected issue in the round.

Margot James

Yes, I understand that and I am very alive to that because it brings in the wider use of social media by people who might be spending what many would consider an unhealthy amount of time online, whatever they are doing online. I certainly would not shirk from agreeing with you that that can be a big problem. You have heard evidence from specialists who have more expertise in terms of the health implications of living most of your life online than I have. In terms of gaming, the general view among specialists is that approximately 1% of gamers have a serious problem, which has given rise to the WHO definition and that area of scrutiny. I would not sit here and be in denial that some people can have a very serious problem, and you have heard from experts who have shared with you the symptoms that that can give forth. I keep saying we are not complacent and we are not. We are not just sitting around and waiting for evidence. We are scrutinising the evidence. I did say that I thought it strange that there was so little in this area. Gaming has been a big business for a long time, a good 20 years, and there has not been a lot of evidence in this area. There should be more research, definitely.

Paul Farrelly

We are going around in circles here. Whether you think it is right or wrong or illiberal or not, some countries in the Far East have recognised that there may very well be a problem and have introduced strict time limits for children. These are countries that are pioneers in the online gaming world. I just asked the very simple question there. What are the Government doing to facilitate or commission research to expand the evidence and to see whether there is a problem that, in a proportionate way, we might need to regulate?

Margot James

Thank you. I will answer your question but I wanted to comment on what you said about other countries because that is very important. A lot of the research, of course, does come from elsewhere, particularly south-east Asia. It is important to remember that when you are reviewing things that can potentially have an addictive quality, there are three things going on, essentially. There is the individual themselves and their propensity to become addicted to anything. There is the environment in which that individual lives. There is the nature of the game in this context or the substance or whatever it is. You cannot divorce one from another. Coming back to your point about all the research coming from south-east Asia, the environment there is extremely different. The family environment is very different. The emphasis on academic success to the exclusion of all else is very different. I hear anecdotally—and I know you have in the Committee—reports from some families in that part of the world who are relieved to see their children doing some gaming because, otherwise, those children would do nothing but study for their exams. They are so focused on those goals to what might be considered an obsessive degree. In those cultures, gaming can be considered a relief. It is important that we look at where the research is from, which underlines the need for more research here, which is where I will come to answering the second part of your question.

Paul Farrelly

It was the first part.

Margot James

No, the second part of your question was about what we are doing, what the Government should be doing and what it is—

Paul Farrelly

You know what the question is. The first part was a comment.

Margot James

I am sorry if I have misunderstood you.

Paul Farrelly

I am keen to get to the good bits. That is putting it better.

Margot James

Coming on then to what is done, in terms of when something becomes a problem, whether it is a lifestyle issue or an addiction to some sort of substance, it comes under mental health and the Government are spending over £2 billion in addition to what they have already committed to spending out of the latest addition to the NHS budget of £20 billion on mental health. There is a lot of need out there, but I do hope that some of that money will be put into research because this area is in need of more investment in local research. At the moment, there is a paucity of research done in this country, which holds the field back and holds treatment of people back. But it is good that we are seeing this extra investment into mental health. Did you want to come back on that?

Paul Farrelly

No, we have to move on. There was no specific answer to a specific question. Finally—and my colleagues want to get into this area later, perhaps, so I do not want to take all the questions—a week or so ago there was an expansion of funding for NHS treatment of children’s gambling addiction, which your Department and the Department for Health have signed up to. There was no mention of gaming within that, yet we have heard pleas from the same person who was involved in that initiative that much more does need to be done and funded in terms of gaming. If you could go away and have a look to see how that initiative might perhaps open up what is being done, looking at research and treatment of gaming addiction, we would be grateful.

Margot James

Thank you for reminding me about that. That is a very good point and I will ask my officials to engage with officials at the Department of Health and Social Care on that point. The other point I did not mention in answer to my earlier question, of course, is the Chief Medical Officer’s work on the amount of screen time that children and young people are being exposed to, which is part of the wider picture. Although some of that work has been published and there has not been a huge amount of definitive new guidance that has come out of it, the work is an evolving thing and Public Health England has committed resources into supporting that work into screen time in the wider context. I will follow up on your suggestion that we look at and encourage the Department of Health to incorporate gaming particularly into that area of research. That is a good suggestion.

Clive Efford

I thought I heard you say that loot boxes were not gambling, but then later in the way you described them you seemed to accept that they were gambling but not proven to be harmful enough to act right now. Could you just clarify? What is the Department’s approach to loot boxes?

Margot James

I certainly did not say they are gambling. My concern would be that if research showed them to be a gateway to gambling, we would be very concerned and we would want to see action being taken. There is some evidence emerging that loot boxes can be a problem, but we cannot yet say that they are gambling. In response to the questioning earlier—

Clive Efford

All right. Let me just pursue that. The playing of a game of chance for a prize of money or money’s worth is gambling under UK law. That is correct. If you pay a stake to gamble, to win money or something of monetary value, that is gambling under UK law. The reason loot boxes are not seen as gambling by the Gambling Commission is because they cannot be monetised. They are in-game prizes. But that is disputed. People can take the things they win and they can monetise them in various ways, as we have discovered in the evidence that has been presented to us. But in principle, because the money cannot be taken out of the game, the Gambling Commission says they are not gambling. How are they not gambling? How are children not getting into the habit of gambling just because they cannot take the prize out of the game? It is still gambling.

Margot James

You just mentioned the definition as including the role of chance. I think that a lot of people who play games would regard the fact that there is a lot of skill involved and it is not purely a game of chance, so I would take issue with the way you have interpreted the definition in terms of chance and extrapolated it to the gaming environment. I take issue with that. I do not want to give the impression that I am not concerned because I am, but it is important that we have a true understanding of what is at stake here before we take one action or another.

Clive Efford

Okay. I know people want to move on, but just one more go at it. This is a playing of a game of chance within a game. Children are being exposed to all the emotions of gambling, even though they are not winning a cash prize that they can go out and spend in a shop. How is it that the Government do not see that as children being exposed to gambling in these online games?

Margot James

We have probably exchanged enough discussion about whether loot boxes equal gambling and the differences in terms of offline gambling between UK law and some other countries, so I am not going to go down that route. Perhaps it would help if I shared the concern I do have about loot boxes, which is not so much relating to the gambling aspect, which may or may not be an issue. If children or young people are spending money they do not have in excessive quantities to make online in-game purchasing, of course that is a big issue and a big concern. Mr Farrelly mentioned in his questioning that, as a parent, if his bank account or that of his child started being emptied because the child was spending too much on these loot boxes, of course that would be a concern. That is clearly an issue for some young people. If young people have a propensity to gamble and if they are excessive game users, I can accept that loot boxes could bring that out and could potentially elicit from them a greater enthusiasm for using loot boxes, which could lead on to other problems. I hope that demonstrates that I am concerned. It is just whether we say this is gambling when perhaps it is not. Perhaps we could agree that if it is a gateway to problem gambling, of course we do need to take action.

Simon Hart

I have a quick one on the back of both of those questions. How much work has the Department done with the Department for Education in assessing teachers' views about the negative impact of prolonged periods of screen time?

Margot James

We are in constant dialogue with the Department for Education and the Department of Health in relation to the sort of work that is being carried out by the Chief Medical Officer and teacher organisations in relation to screen time quite generally. In fact, two weeks ago, I chaired a roundtable of special educational providers and specialist colleges teaching young adults with learning difficulties. They expressed their great concern to me that a lot of young people were coming into their colleges not fit to learn because they had been up until 5 o’clock in the morning playing whatever the latest game was. So, yes, we are in constant dialogue with the Department for Education on that very important matter.

Simon Hart

That suggests to me that there is a problem that possibly needs further investigation.

Margot James

Yes. I am glad someone has asked me a question about the general issue of screen time and the fact that some of it can be used in an online gaming environment and that for people, especially if they have a degree of compulsion or obsession within their personality, it can become a big problem. Thank you for moving the discussion on to a wider context than just loot boxes.

Simon Hart

I am sure I am interrupting the flow here a bit, but it was relevant to previous hearings we have had. The most obvious example was Epic Games and the reference to Fortnite. If you look it up, there is global concern being reflected by people from a range of different backgrounds and a range of different age groups about the potentially damaging and addictive impact of that game. I do not want to choose them unnecessarily but it was a good example. I was slightly surprised—I cannot speak for anybody else—about how the reaction was, “We do not know what the evidence is. We do not collect that kind of data”. I am not quoting them. I am paraphrasing them in my own crude way, but it was sort of, “It is not our problem. We just make the game”. At what stage do the Government deploy some precautionary principles in this?

Margot James

I have read some of the evidence and I share your concern that some commercial organisations did give the impression that they were about making a game and, if it was successful, great and, if it was not, move on. That is not an attitude that can prevail in this industry over the medium term because, as you rightly say, some of their products are so successful that they can cause users to spend such an inordinate amount of time on them that sleep and other activities of normal daily life are sacrificed. When that impairs their ability to work or study or socialise offline, we have a problem. It is not good enough just to create a game and wash their hands of the potential consequences. I must say just before I finish that that is certainly not the attitude of many of the gaming companies that cross my path, but there is a problem with some of them.

Simon Hart

Do you believe, though, as would be the case for any company producing a product for consumers, that it is their responsibility to undertake the research that would identify once and for all whether there was a harmful aspect to their product and their responsibility to introduce measures to mitigate those potentially damaging aspects, and that if they do not, it then becomes the Government’s responsibility?

Margot James

You made some very good points there. They have a responsibility to learn from the data they are collecting, indeed, and there are various measures that they could reasonably put in place and which are put in place in some other countries, particularly in the Far East. I am not necessarily advocating that we do the same thing, but it is possible. You make a good point. I would caution against the assumption that it is only the industry that should be investing in the research, though, because there is an issue of independence. As the Government, we need to be satisfied that there is an independence in the research that is garnered or commissioned. There is a role there for public funding of research. But the manufacturers should definitely be collecting data and, in time, if they are coming into the scope of an online harms regulator, they will be expected to have a duty of care to the user base. I think that most reasonable people would think that they do have a duty of care, with or without regulation, and that is what we will be looking to them to demonstrate over the next 18 months before the regulator comes into existence.

Chair

I have a couple of questions to follow up on this. Do the Government accept the World Health Organisation’s definition of “gaming disorder”?

Margot James

The Department of Health and Social Care, which is the lead Department in that area, takes the WHO’s pronouncements and research and guidance extremely seriously and there is no reason why this should be an exception to that rule.

Chair

On that basis, do you think that games companies should proactively monitor unusual activity, be it excessive spending, excessive gameplay, maybe a substantial increase in either by a user? Should that be something that games companies independently monitor and then seek to act upon?

Margot James

I have to be cautious answering your question because we are not yet at the state where we are issuing rules and regulations to gaming companies. As I said in answer to the previous question, we do expect a duty of care to users and we are seeking, as we have discussed this morning, to regulate, ultimately, on this and to require it. Companies should take the WHO definition seriously. There is some controversy about it. I would like to add that. Even at WHO level, they acknowledge that there is a need for more research. However, gaming companies should take this seriously. There are a variety of things they could introduce to support their user base to alert, as you have suggested in your questioning, excessive screen time on one game and that sort of thing. I would see that as a reasonable response to the concerns that the new definition has given voice to.

Chair

We have taken evidence from some of the biggest games companies and they dispute the entire term “gaming disorder”. They do not accept the term and they do not think they are under any obligation to proactively identify people who may be suffering from gaming disorder.

Margot James

I did mention that there is some controversy around this. The WHO definition has come within its “disorders due to addictive behaviours” section. That is where it is lying. There are some US commentators and researchers who have alleged that this is part of a train of—I quote—“making a mental disorder of everything we like to do a lot”. Some members of the WHO’s working group for these impulse control disorders have suggested that there was insufficient evidence to justify gaming disorder’s classification. This is what I meant by an element of controversy over the definition. We should look more broadly at problem behaviours involving excessive screen time, the role of electronic devices and the like in a broader context. That is a longwinded answer to your question. I can understand that some gaming companies have reacted against the definition because there is some controversy, even among the members of the committee who brought it into the public domain.

Chair

It is more than that. The games companies do not want to have to police this. They are gathering data about their users to sell them more stuff, but they are not using that data to identify people who might be engaged in harmful or addictive behaviour. If someone self-refers, they might act on that. But if someone is suddenly spending vastly more than they were before or vastly more than is normal and becomes a massive outlier, they feel under no obligation at all to do anything about that. It is easy to sit back and say there needs to be more research, but if you as a company are holding on to the data that that research can be based on and are not making it available to anyone and are not obliged to do that, they will always question the research that is being done because it is not based on their data because they will not make it accessible.

Margot James

You make some very powerful points there. I heard the Information Commissioner state to the Committee earlier this morning that the approaches to gaming companies to get some of these data in the drafting of the child-friendly code had not been fruitful, which is very disappointing. I share your concern that you have mentioned there about companies sitting on a great wealth of data. If they are not sharing it, perhaps it is time they did or at least learned from it themselves. One of your experts in one of your earlier sessions mentioned that gaming is several years behind gambling in relation to protecting the vulnerable. If that is true, then that is lamentable and the industry has a job to do.

Chair

Do you accept here that there is something about the business model of modern games companies? They have an incentive to keep people playing as long as possible. When you have freemium games that are free to play but the company makes money through in-game purchases, the longer someone plays, the more likely they are to make those in-game purchases and the more money the company makes. It is very different to a Netflix subscription. I could watch Netflix 24 hours a day and Netflix does not make any more money out of me doing that than if I watched it for one hour a day or did not watch it at all but had a subscription. These companies have a financial incentive to get people to return as often as possible and to play for as long as possible because they make their money through in-game purchases. That is why we should take this more seriously. It is not just a question of screen time and addiction to all sorts of different media that people consume via devices and screens, but also that the companies have a financial vested interest in people being actively engaged with the product as much as possible.

Margot James

That model you have just described can give rise to those sorts of commercial objectives, I would definitely agree with that, but it does not always give rise to those sorts of commercial objectives. A more mature company should be seeing the benefits of demonstrating a care for its user base in the way you have outlined you would like it to do. But there is a distinction between possibly young companies—I would not even say that because I can think of a couple of young gaming companies that have great regard for the care of their user base. It is like any industry. There are some companies that have a short-term view that, in crude terms, “The more time you spend on my site, the more money I make”. That is not true of all companies in this sector or, indeed, of any other sector. There are companies that have a longer-term and more responsible attitude to their customer base compared with other companies that have a short-term and more regressive view of their user base. The latter need to be brought into line.

Chair

Indeed. It is a big sector and there are lots of different players within it. But when we are questioning companies like King, which makes Candy Crush and has 270 million active users a month, it is reasonable for us to challenge these companies on the way their businesses run and whether they are seeking to exploit users and make money out of them and what duty of care they have to them. The consistent reply we have had from the companies that have given evidence to this inquiry has been that, basically, they dispute the existence of gaming disorder and they see themselves as under no obligation at all to proactively identify users who might be engaged in behaviour that could be considered to be addictive and, therefore, might be harmful to them and their interests. We have had evidence, though, throughout the inquiry from people who have had gaming addiction and who seek to help others who have it, too.

Margot James

What you say is regrettable. I have not read all the evidence yet that companies have given you and I will. It is very regrettable if that attitude is commonplace. Certainly, some of the experts from the medical arena and independent researchers you have heard evidence from do give rise to concern. Even if it is just 1% of gamers who are affected as adversely as this WHO definition implies, globally 1% of 1 billion people is a lot of people, so it is something that I would take seriously in my capacity as Minister for Digital, definitely. As I say, it might affect only a small proportion but, in terms of numbers of people, it can be quite a large number. From what I have read, you are talking about the people who are treating people with a problem of this nature. It is totally destructive of the rest of their lives and needs attention.

Chair

The Centre for Data Ethics and Innovation is looking at things like algorithmic bias and whether companies like YouTube are responsible and whether their algorithms are directing people towards harmful content and so on. Would it also be in the scope of their work to consider whether the way in which games companies gather data about the user experience to try to stimulate more activity is just about improving the performance of the game and people’s enjoyment of it? Should we also be considering whether they are stimulating or seeking to stimulate increasingly harmful levels of exposure to their products?

Margot James

Certainly, somebody somewhere should be researching what you have just outlined the need for. I am not sure if it would be the Centre for Data Ethics and Innovation, but there is definitely—as I said right at the beginning of this session—a need for and a role for independent research of that nature.

Chair

This is an observation rather than a question. One of the frustrations we have had throughout this process is that no one is doing that work. The games companies have no interest in doing it and they will not make available the data. Someone else will need to do it. It is the same frustration that we have when talking to companies like Facebook that, again, are highly selective in the research they will allow people to do. Therefore, it is left to outside bodies to try to form a judgment as to what they think is necessary. I want to touch finally on one thing. I do not want to go back over loot boxes again in detail. We have covered that sufficiently. But do you accept that there are different types of loot boxes? There is one form of loot box where, as you said, you are just buying skins for a character or you are buying enhancements to the game. There are other forms of loot box like the player cards in FIFA, where you are speculating on the quality of the players you will get. Someone is making a purchase that is effectively like spinning a roulette wheel. They do not know what they are going to get or how good it is going to be, but they are spending money to speculate on getting better players as part of their team. Would you not see that those sorts of loot boxes come much more into the territory of questioning whether it is a game of chance and whether it is encouraging people to speculate real world money in the hope of a benefit within the game that they may not actually get?

Margot James

I accept that there are differences within the whole loot box environment, of course. I can see that some might be potentially more dangerous in terms of that correlation with the propensity to gamble and the emergence of problem gambling. I would accept your point there.

Jo Stevens

I have listened very carefully to your evidence this morning and I was pleased to hear you say that even though gaming disorder may affect only 1% of gamers, you take it very seriously. You also talked today about the lack of evidence and the paucity of research to enable you to look at this. Last year, your Department published its “Areas of Research Interest” document setting out those areas where you are encouraging new research and discussion. There is no mention of game mechanics or gaming disorder in that document and there is nothing in the Department of Health and Social Care’s equivalent document. Why not?

Margot James

I am not familiar with my own Department's document that you just referred to. I apologise for that and I will certainly get familiar with it. As the Minister responsible for gaming, my concern about the issues that form this inquiry has been heightened by your inquiry. That would account for the fact that I have not been pushing for research to date. As a consequence of your inquiry I will do so as a direct result of your Committee’s work. I cannot speak for the Department of Health and Social Care. It has a vast research remit. It would come under, I suppose, as I was alluding to in my answer to Mr Farrelly, the mental health disorders area of research. I would hope that the additional funding that is going into mental health will include some funding for research. The other people to ask are the Medical Research Council, which has vast resources available for research, some of which surely goes into researching mental health areas. I would see this as coming into that.

Jo Stevens

The document was published in May of last year.

Margot James

Thank you.

Jo Stevens

I appreciate your honesty in telling us that you are not aware of it, but I find that quite surprising. Moving on, I have only one other question—

Margot James

Could you tell me the title of that document?

Jo Stevens

"Areas of Research Interest", it is called.

Margot James

All right. May last year. Thank you.

Jo Stevens

Yes. I want to move on to a completely separate issue. We recently did a visit to Dundee and met Paul Durrant from the UK Games Fund. He told us that he is waiting for clarity about the future of the project. What are your Department's intentions for the UK Games Fund when funding runs out in March next year?

Margot James

We judged the UK Games Fund to have been successful and we would hope to have funding to continue its good work, but of course that would be a function of the next spending review so we cannot be completely definite about that. It is certainly something that we would want to continue.

Chair

If I could ask a question about something related not to the inquiry today but to a previous inquiry, when do you think the Government will respond to the Committee’s inquiry into live music? We are currently seven weeks late for the Government’s response. We wanted to make sure it had not been forgotten.

Margot James

That is a very good prompt. Imminently. I do not know the answer to the week or the month, but it is certainly something I would expect to see over the course of the summer.

Chair

Finally, we asked the Information Commissioner about the timetable for the delivery of the age-appropriate design code. The Department, I am sure, will have had lots of feedback about the code since it was published in draft form.

Margot James

Yes.

Chair

What is your view on when the age-appropriate design code might be implemented? Do you feel it needs more work? When do you think we could see the Information Commissioner’s code being introduced in law?

Margot James

The consultation closed only at the end of May. I know that the ICO is, as we speak, going through all the responses received and will be doing some further consultation, I am sure. They will be weighing up what they have heard. There is a requirement on the ICO to bring the code forward within 12 months, I believe, but it is entirely up to the ICO as to when that will be. I know that some of the responses have called for more time for companies to adapt and amend their designs so that they are compliant with the final code. That will be something that the ICO will consider along with all the responses received.

Chair

Has the Department welcomed the approach to preparing, drafting and presenting the age-appropriate design code? Does the Department welcome the principles that underpin it?

Margot James

I welcome it fully and wholly. It is absolutely vital. I played a key part in making sure that the data protection legislation last year was amended to include it.

Chair

Very good. That concludes the committee’s questions. Thank you very much.

Margot James

Thank you very much and thank you very much indeed for this vital work.