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How will the Autumn Budget affect founders and entrepreneurs?

Posted on by Luke Brazier

John Healey delivered his first Budget as Chancellor on 28 October announcing a number of measures that could affect entrepreneurs and their businesses.

These include a consultation on a new capital gains tax (CGT) relief for founders. The relief would provide a 10% rate of CGT on lifetime gains of up to £10m to “support founders and early investors who have made a significant long-term contribution to the creation and development of the UK’s most high-growth and innovative companies”.

At first this looks like a throwback to the previous limit for entrepreneurs’ relief (ER) before it was amended and rebranded as business asset disposal relief (BADR). However, founders’ relief will be far more limited than either ER or BADR.

Amongst the qualifying conditions, the founder will need to have held 25% of the shares in the company from when it was formed and then continued to hold those shares for at least five tax years before their disposal. The company must then satisfy a set of stringent conditions on a subsequent disposal of the shares in order for the relief to apply. The consultation document proposes conditions including UK presence and trading requirements, turnover of at least £10m and at least 15 qualifying full-time employees in the accounting period before disposal, and satisfaction of at least two out of three tests relating turnover growth, headcount growth and R&D claims.

The consultation closes on 30 November 2026 ahead of its implementation on 6 April 2027.

Alongside this, the government has announced a reduction in the lifetime limit on gains qualifying for BADR from £1m to £500,000 for disposals on or after 6 April 2027. This reduction is a further whittling away of the original £10m limit that applied to ER.

There were some welcome changes to company share option plan (CSOP) options. CSOP will be rebranded as enterprise management incentives 2 (EMI2). The intention is to reflect CSOP’s role as an alternative for companies that have grown beyond the qualifying conditions, or are not eligible, for EMI.

From 6 April 2027:

  • The individual EMI2 option limit will be increased from £60,000 to £120,000 (having previously doubled from £30,000 to £60,000 from 6 April 2023).
  • The maximum period for exercising EMI2 options while retaining tax advantages will be extended from 10 years to 15 years, bringing it into line with the maximum period that has applied to EMI options since 6 April 2026. As with the extension of the period for exercising EMI options, it will be possible to amend CSOP options granted before 6 April 2027 to benefit from this without losing tax advantages, provided that this is done in line with the legislation.
  • The interaction between the EMI and EMI2 individual option limits will be removed, allowing eligible employees to use the full £250,000 EMI limit and £120,000 EMI2 limit independently. This will increase the maximum value of tax-advantaged options that an eligible employee can hold across the two schemes from £250,000 to £370,000.

Unlike EMI options, one of the key aspects of CSOP options is that the exercise price cannot be less than the market value of the shares at the date of grant without losing all of the CSOP tax reliefs. This means that it is crucial to get the right valuation approved by HMRC when the CSOP options are granted. If HMRC subsequently determines that the initial valuation is incorrect, which may be because inaccurate information was submitted to HMRC, then the entire difference between the exercise price and the market value of the shares at exercise of the option will be subject to income tax and potentially NICs. If an EMI valuation is subsequently challenged by HMRC, only the difference between the original valuation at the date of grant and the correct valuation at the date of grant would be taxed as income, and the remining growth in value of the shares would still be subject to CGT. This means that a robust valuation submission is essential for CSOP options.

Upcoming reform of non-compete clauses: what does this mean for you?

Posted on by Anna Weeden

On Friday 9 October, PM Andy Burnham confirmed that the UK Government intend to take steps to restrict the use of non-compete clauses used to restrict workers from “joining rival organisations”.

This follows the exploration in recent years, by both Conservative and Labour led governments, of reform in this area, although on each occasion no change materialised. We unpack the key background to these upcoming reforms and how they will affect businesses and employees when they come into force.

Where do things currently stand?

Under current English law, non-compete clauses are enforceable where an employer can show the restriction is reasonable in scope, duration and geography, and is necessary to protect a legitimate business interest. There is no statutory cap on duration, no salary threshold and no obligation to pay employees during a non-compete period.

However, whilst they are a common feature in many employee contracts, the Court’s starting point will always be the principle that individuals should be free to trade. Accordingly, employers will often seek to rely on less onerous restrictions; such as those limiting the solicitation of, or dealings with, clients and colleagues, in order to protect their business interests.

The Government’s working paper issued in November 2025, closed in February 2026, and the speech on 9 October was the first time the Government has made a commitment towards any particular change. The Chancellor’s Budget announcement on 28 October may also provide further insight but any changes are unlikely to come into effect until 2027 at the earliest.

Why is the Government acting now?

 Around 5 million employees in the UK are estimated to be working under a non-compete clause, typically running for periods of three months upwards. It is very unusual for non-compete provisions in excess of one year to be enforced in relation to an employee (rather than, for instance, in a business-to-business context).

The Government explained its concern, in the 2025 working paper, that non-compete clauses are too frequently used as a matter of routine rather than genuine necessity, and in situations where enforcement is not a realistic possibility.

The Government argued that this:

  • Restricts workers’ ability to move jobs or start new businesses;
  • Suppresses wages, particularly for lower-paid workers who lack the resources to challenge a clause;
  • Limits the flow of skills, talent and ideas that drives economic growth and innovation.

At the same time, the working paper recognised that non-competes can serve a legitimate purpose: they give employers confidence to invest in training, share sensitive information, and build long-term competitive advantage, knowing that knowledge cannot simply be “walked out of the door.”

The Prime Minister’s 9 October speech made clear the Government’s intent to limit the use of non-competes.

The global attitude towards non-competes has followed a similar trend towards restricting the use of or outright banning non-competes. In 2024, under Biden’s administration, the Federal Trade Commission attempted to implement a US-wide ban. This was later blocked under Trump in 2025. A few US states, such as California, do prohibit non-competes entirely. The use of these clauses also varies across Europe but with countries such as France, Germany and Italy requiring employers to remunerate employees for any period of restriction. This is in contrast to the UK position where these periods are typically unpaid.

 What changes are being considered?

The Government’s working paper (linked above) sets out four main options, any of which could form the basis of legislation: 

  • A cap on duration. A statutory maximum on how long a non-compete can last. A three-month cap was proposed by the previous government in 2023 but was never enacted. There is also talk of introducing a cap by employer size e.g. a shorter limit for larger businesses and a longer one for smaller firms.
  • A salary threshold. Banning non-competes only in respect of employees earning below a set income level. Higher-earning employees may still be subject to non-competes. This approach is already used in parts of the US and Europe.
  • An outright ban. Rendering all non-compete clauses in employment contracts unenforceable, as is the position in India.
  • Mandatory compensation. Requiring employers to pay employees throughout any non-compete period which may result in a fuller cost-benefit analysis being taken by employers (both when drafting the contract for a new employee, and when considering whether to insist on an exiting employee abiding by a non-compete restriction).

 The Government has also signalled that long notice periods and enforced garden leave may come under scrutiny as part of the same reform agenda.

What does this mean in practice?

The substance of any proposed changes remains to be seen. Accordingly, it would be premature for businesses to make significant changes to their approach towards the use of non-compete provisions.

However, given the government has signalled its intention to limit the use of non-competes, it remains prudent to consider what other tools can be used to retain staff and to protect the business. These would include other contractual restrictions (such as non-dealing and non-solicitation provisions), along with incentive based arrangements (potentially with an element of deferral such that payments will only be made following a certain period of loyal (i.e. non-competitive) behaviour – or, more simply, continued employment. It will remain that case that only those employees with significant bargaining power will be in a position to negotiate the non-compete (and other post-termination restriction) clauses proposed by the employer – although the dynamic of those negotiations may alter depending on the eventual shape of the new rules.

Stay ahead of the curve

The timing and scope of this legislation will be critical. Particularly whether it applies to contracts already in existence or only to those entered into after any reform takes effect. These are questions that will significantly affect both employment strategy and individual planning.

We are monitoring developments closely and will provide further updates as the position becomes clearer.

To discuss further, please do not hesitate to get in touch with our employment lawyers.

Remember, remember the third of November – Copyright, AI and Chatbots

Posted on by Lauren Sinclair

On 29 September, the European Commission launched a public consultation on possible reforms to EU copyright law.

The consultation forms part of the Commission’s wider review of the 2019 Copyright in the Digital Single Market Directive, which introduced (among other things) a commercial text and data mining (TDM) exception with a rights holder opt-out in the EU. The rapid rise of generative artificial intelligence has posed significant challenges to the efficacy of the TDM exception, with rights holders facing difficulties in opting their content out of AI training. In light of this, the Commission is exploring ways to facilitate the licensing and enforcement of copyright and related rights in the AI context, while enabling AI providers to lawfully access quality copyright-protected content for AI innovation within Europe.

The consultation asks both rights holders and AI providers to give feedback on these difficulties and to rank various policy options that could address them. The options include legislative and non-legislative measures, which range from maintaining the status quo, clarifying the application of existing EU copyright rules for AI uses and operationalising the TDM opt-out, to introducing a rebuttable presumption of use of copyrighted content by AI providers in certain circumstances (e.g. where AI providers do not comply with the EU AI Act’s transparency obligations). Potential measures to facilitate AI licensing include developing model contractual clauses, promoting collective licensing and introducing a specific remuneration right.

The consultation covers a number of other topics that may be relevant to authors and publishers, including proposals relating to non-commercial scientific research exceptions (e.g. making the current, optional exception for scientific research mandatory across the EU or expanding its scope to include commercial research) and secondary publication rights (e.g. introducing an EU-wide Secondary Publication Right that would allow authors to share publicly funded research works openly and separately from the published version). It also proposes protections against AI-generated imitation of performers (see our previous update on whether existing IP rights can protect your image and persona here) and measures against online piracy of time-sensitive content (such as live events). The Commission has stressed that the consultation is not an exhaustive or final list of the measures under consideration.

Although any measures implemented following the consultation will not apply in the UK, they will impact businesses that operate in Europe and set a precedent that other jurisdictions may (or may not) choose to follow. The UK government has repeatedly considered introducing a European-style commercial TDM exception to encourage AI training and development within the UK, but it formally abandoned plans to do so earlier this year.

The Commission wants to receive feedback from both sides of the AI and copyright debate, including AI providers, authors, publishers, and other rights holders. If you want to provide your views and have not yet done so, the deadline to respond is fast approaching: the consultation closes on 3 November 2026.

Coincidentally, that is the same day that Advocate General Szpunar’s opinion in the CJEU case Like Company v Google Ireland is due to be released, which is expected to address whether training an LLM-based chatbot constitutes an instance of reproduction under EU copyright law and, if so, whether such reproduction falls within the commercial TDM exception. While not binding, the Advocate General’s opinion often provides an early signal of the direction the CJEU’s decision may take. As the first case in which the CJEU has considered copyright in the context of AI training, the CJEU’s eventual decision will have a significant impact upon the position of rights-holders and the control they can exercise over the use of their copyright-protected content for AI training within Europe. We will keep you posted.

If you would like to speak to us about how these developments may impact the publishing sector, please contact a member of our team below.

£6 million in consumer law fines issued by the UK’s Competition and Markets Authority

Posted on by Jess Brady

On 14 October 2026, the UK’s main consumer law regulator, the Competition and Markets Authority (CMA), issued three fines totalling £6 million and ordered £440,000 in refunds for consumers in relation to breaches of consumer law.

Time-limited offers: Wayfair

Wayfair ran ‘Daily Deals’ and 24-hour ‘Flash Deals’ on its website, reinforced by slogans such as ‘Here Today, Gone Tomorrow’ and countdown timers – techniques usually implemented to create hype and encourage shoppers to act fast to secure the best price. The regulator found that a significant number of these products stayed on sale at the same (or lower prices) once the advertised deadline had passed. The CMA concluded that presenting offers in this way unfairly pushed consumers into buying products quickly when there was no need to rush. The CMA issued a £4.8 million fine to Wayfair.  

Time-limited offers and pre-ticked checkboxes: Appliances Direct

The CMA found that Appliances Direct was signing customers up automatically (without their express consent) to paid extras, such as an appliance recycling scheme and an installation service. The Consumer Contracts Regulations 2013 require that a business must obtain a consumer’s express consent to any additional add-on payments; pre-ticked boxes are not sufficient for this purpose.

Separately, the retailer displayed countdown banners on product pages advertising £10 – £25 discounts as only available for a limited time. However, the CMA found the same discount codes re-surfaced several times over the following days. The CMA considered that this unfairly pressurised consumers into making purchases. Appliances Direct was fined £1.2 million and ordered to repay around £432,000 to affected customers in relation to the additional charges.

Mandatory joining fee: Gold’s Gym

The CMA found that Gold’s Gym, a London-based UK gym franchise, omitted the joining fee from the headline price quoted to consumers, or otherwise failed to show the total price in a clear way. The regulator found that these practices infringed the ‘drip pricing’ rule under the Digital Markets, Competition and Consumers Act 2024 (DMCCA). Under those rules, an “invitation to purchase” omits material information (in breach of consumer law), if it fails to state the total price of a product, which must include any fees, taxes, charges or other payments the consumer will necessarily incur. Gold’s Gym has been ordered to refund consumers £9,220 and has been fined £45,000.

Key takeaways

  • Growing scrutiny: The CMA has been flexing its muscles since the introduction of direct fining powers under the DMCCA. In the last 18 months, it reports issuing fines of more than £12 million and ordering nearly £2.4 million in refunds for consumers. Online sales tactics are a live risk area, and enforcement in this space is ongoing. Business-to-consumer brands should be routinely checking their marketing claims and customer purchase journeys in light of this increasing scrutiny.
  • Audit time-limited offers: Pressure selling and false urgency have been on the CMA’s radar for some time (at least since the March 2023 pressure selling guidance). If a deal is marketed as ending on a specific date, make sure it genuinely does not continue on discount (or a comparable discount) after that date. This type of practice is also relatively easy for the CMA to spot and evidence on its own initiative – simply by monitoring a website and recording prices over time.
  • Remove pre-ticked boxes: Any optional extras (recycling, installation, insurance, etc.) must require the customer to actively opt in; default opt-ins are not sufficient consent.
  • Show the total price upfront: Mandatory fees, including joining or admin fees, must be included in the headline price shown to the customer, and not revealed later in the purchase journey.

Cohabitants’ rights: What the Government’s proposed law reforms could mean for you

Posted on by Kirsty Malthouse

There remains a misconception amongst the public at large that, over time, people in long-term cohabiting relationships gain the rights of married couples and become “common-law” married.

In truth, the rights and claims cohabiting but unmarried couples have against each other are extremely limited and not fit for modern families. This could all be about to change – on 5 June 2026, the Law Commission published its report setting out how the law relating to cohabiting couples should be reformed, with the government endorsing its publication.  

At the moment, family law is silent on the rights and claims cohabiting couples have against each other, unless children are involved. Instead, when such a relationship breaks down, couples have to pursue their claims in the civil court under the Trusts of Land and Appointment of Trustees Act 1996 (colloquially known as “TLATA”). Instead of having a broad discretion to make financial awards based on principles such as “sharing” and “needs” (as is the case for married couples), the civil court has to apply land law and trust principles. These principles are complicated for non-lawyers to understand; many of them come, by a long and winding legal path, from rules originally designed for property disputes between businesses, not for separating couples. The civil courts are also ill-equipped to deal with the unique issues that can arise in familial disputes, such as domestic violence and issues of coercive control.

Separately, if an unmarried couple has children, they may need to bring separate proceedings in the family court under Schedule 1 of the Children Act 1989. Although interlinked, the areas covered by TLATA and Schedule 1 are kept separate by a legal process which is difficult for parties to navigate. This demarcation increases costs and causes delay. In a cost-of-living crisis, this is unfair on families and particularly, children who need stability.

In short, reform is long overdue.

The government’s report recognises that the myth of a common law marriage must be addressed. 47% of unmarried couples believe that they acquire rights by virtue of the length of their relationship and are unaware of the limited financial provision available to them on separation or the death of their partner[1]. When 3.5 million couples are unmarried[2] and over half of babies born in 2022 were born to unwed parents[3], this is a significant portion of the general public. A public information campaign is clearly necessary.

Who does the Law Commission say should be considered a cohabitant?

The report suggests that the law should define cohabitants as a couple “living together in an enduring family relationship”. Implicit in this definition is that the relationship is romantic. This means that people living together as siblings or flatmates would not be cohabitants, and only adults over the age of 18 will be considered cohabitants.

Before someone could make an application for a financial claim against a cohabiting partner they would need to demonstrate that they have lived together for a minimum of three years unless there is a child living there (whether born to the couple, or treated as a “child of the family”). If there is a child of the family then the report says no minimum duration should apply.

A two-year time-limit for cohabitants to bring claims after separation is intended to ensure that people cannot come back out of the woodwork with claims years later but the breakdown of a relationship rarely has a clean end point so there remains scope for parties to become embroiled in legal disputes.

What financial claims could cohabitants have against each other?

The report is suggesting that the principle of “needs”, which will be familiar to any family lawyer, should be extended so that it applies to suitably qualified cohabiting relationships too.

In the context of divorce, “needs” is a concept that looks towards what a person requires to meet their reasonable housing costs and monthly outgoings. When assessing what these are, the court will consider the standard of living during the marriage. The government suggests that applying the principle of needs, but crucially not sharing, to cohabiting relationships will mean that the distinct legal status of marriage (and benefits of it) will be preserved whilst suitable safeguards will be put in place for otherwise financially vulnerable cohabitants. In theory, it should also provide greater stability for children if their parents’ relationship breaks down.

When applying the principle of “needs” to cohabitants, the report suggests that needs can be less than the standard of living during the relationship and “discretionary needs” (i.e. everyday luxuries, like holidays) should be excluded from the assessment. The proposal is therefore less generous to cohabitants than it is to married couples with needs-based claims. The proposal is meant to provide economically weaker parties, usually women, with financial support on a relationship breakdown so they are not left in a position of real need but not to put them in the same position they would be had they been married.

Some experts argue that this does not go far enough.

Resolution, a network of family law professionals, has said in response to the proposal that “needs are needs, regardless of whether a couple are married or not married.”[4] It supports a suggestion that having regard to the standard of living should be relevant when assessing a cohabitant’s needs and that discretionary needs should also be included. Resolution is concerned about a two-tier approach being inadvertently implemented where children of married parents receive better protection than children of unmarried parents.

When assessing needs relating to children in Schedule 1, the court at the moment makes no distinction from needs in divorce proceedings. So should the report be implemented, without any amendments regarding “needs”, itwould be less generous than the law that applies currently to unmarried parents.  

What could cohabitants now be entitled to under the new proposal?

The government is proposing that the remedies available to cohabiting couples would generally mirror those that are available to divorcing couples. This means that the court would have the power to make the following orders in relation to cohabitants:

  • Property adjustment orders (ie transfer the whole or part of a property to one of the parties)
  • Lump sum orders
  • Pension sharing orders

The proposal suggests that the court would also have the power to make maintenance orders, including in cases where there are no children. In contrast to matrimonial cases, under the proposal, if the parties were unmarried a maintenance order would only be made in exceptional circumstances, such as severe illness. Maintenance would also be time-limited with no possibility to extend.

The new scope of the court’s powers will be of concern to people who have purposefully chosen not to get married to keep their financial arrangements separate. The government’s report therefore opines that there should be an opt-out process where people can elect not to have any new law reflecting the proposed reforms apply to their relationship. This begs questions, however, as to the legitimacy of such opt-outs, ie to what extent are they chosen independently and without undue pressure?

The risk with the suggestion of an opt-out is also that people may not be aware of the new regime or their ability to opt out of it. People who may not want their relationship to be considered a cohabiting one under the law may, unless they know it to be proactive and opt-out, be unexpectedly caught by these new rules.

What’s the current status of cohabitation law reform in the UK?

Successive UK governments have been suggesting for decades that the law on cohabitation should change and to date very little progress has been made. The proposal was published on 5 June 2026 and the government invited comments on it by 14 August 2026. There has been no timetable put forward for new legislation to be discussed or passed in Parliament and so, if changes to the law are going to be made then it is unlikely to be for some time yet.

Key takeaway

The proposed reforms would, for the first time, give cohabiting couples a meaningful framework of financial rights on separation. However, the proposals are not without controversy, and there is currently no timetable for legislation. If you are in a cohabiting relationship, or advising someone who is, now is a good time to consider what protections are, and are not, in place.

If you would like advice on any of the issues raised in this article, please do not hesitate to get in touch with a member of our family team.

[1] Law Commission, A fairer end to relationships: A consultation on reforming financial remedies on divorce and strengthening protections for cohabitants at the end of their relationship, June 2026 (Page 29): John Curtice et al (eds), British Social Attitudes: The 36th Report (NatCen 2019).

[2] Law Commission, A fairer end to relationships: A consultation on reforming financial remedies on divorce and strengthening protections for cohabitants at the end of their relationship, June 2026 (Page 29): Office for National Statistics, Families and households (dataset, 17 April 2026)

[3] Law Commission, A fairer end to relationships: A consultation on reforming financial remedies on divorce and strengthening protections for cohabitants at the end of their relationship, June 2026 (Page 29): Law Commission, Cohabitation: The Financial Consequences of Relationship Breakdown (Cm 7182, 2007), para 1.10; Office for National Statistics, Birth characteristics in England and Wales: 2022 (17 May 2024)

[4] Resolution’s response to the Ministry of Justice, August 2026 (page 38)

CPC Network enforcement actions on in-game currencies: what video game companies need to know

Posted on by Jess Brady

Last week, the EU Consumer Protection Cooperation Network (CPC Network) launched a coordinated enforcement action against nine video game companies in relation to the use of in-game currency.

The CPC Network is a network of national authorities responsible for enforcing EU consumer protection laws and serves as the vehicle for coordinated cross-border enforcement. Given the international nature of video games, the CPC Network elected to pursue an EU/EEA-wide enforcement approach under the CPC Regulation.

These announcements from the European Commission and the CPC Network mark the next phase in the tussle between regulators and the video game industry over what consumer law compliance should look like for in-game currencies. A spate of press releases from national consumer authorities also echoed the announcements with some stern words from officials (including Ireland, Sweden, and the Netherlands).

The CPC Principles

These enforcement actions relate to the CPC Network’s “Key Principles on In-game Virtual Currencies” (Principles), published in March 2025. The CPC Network takes the position that premium in-game currency (i.e. currency purchased with real-world money) obscures the real value of in-game content and is a mechanism through which companies try to deny certain mandatory consumer rights. Core to the CPC Network’s argument is that premium in-game currency constitutes a “digital representation of value”. If a consumer spends that premium in-game currency, the consumer should be entitled to the same protections which arise when real-world money is spent, including pre-contractual information rights and 14-day withdrawal rights. However, there are serious and growing concerns in industry about whether the Principles apply the underlying consumer protection laws correctly. If you are interested in further detail on this, you can also read our article on the CJEU Runescape Gold case here.

Briefly, the actions seek to ensure the following are applied from the Principles:

  • Real-world pricing: real-world prices must be displayed for in-game items and in-game currencies.
  • Obscuring costs: game companies should not implement multiple types of in-game currencies or exchange pathways that obscure the true cost of in-game items.
  • Forced spend: players should not feel obligated to buy an unnecessary amount of in-game currency in order to progress or enjoy the game.
  • Clear pre-contract information: players should be presented with clear pre-contract information concerning their purchase before the transaction for their in-game items or in-game currencies is completed.
  • Withdrawal rights: players must be told about their 14-day withdrawal rights prior to purchase, which includes their right to withdraw in respect of unused in-game currency.
  • Transparent terms: the terms and conditions governing in-game currency must be fair and transparent as required under consumer law.
  • Vulnerable consumers: vulnerable players are afforded a greater degree of protection under consumer law, and so appropriate safeguards should be put in place, particularly for children.

Interestingly, the CPC Network appears to be treating compliance with the Principles (which are not law) as mandatory, given that the enforcement actions are specifically directed at enforcing them.

Disappointingly, the Principles have not been amended since their publication in March 2025, suggesting that stakeholder dialogue was not as productive as it could have been. The European Commission notes this, saying “As the dialogue did not bring satisfactory results, the Network proceeded with a market check and identified several games, which would require further assessment”.

In addition to enforcement of the Principles, the CPC Network is also taking action on broader issues including personal data collection, addictive game design, parental control settings, direct marketing to children, and the blocking of gaming accounts. Its Joint Statement also signals particular attention on variable reward systems (e.g. loot boxes) and dark patterns.

Key takeaways

  • These actions are part of the already intensifying regulatory scrutiny of the video game industry across Europe, particularly on in-game transactions, in-game currencies and the protection of vulnerable users.
  • Given the ongoing debate about the legal basis for the Principles, some in the industry had been waiting for the outcome of the stakeholder dialogue before committing to compliance roadmaps. That dialogue has not led to a resolution, and the CPC Network is proceeding to enforcement.
  • The CPC Network is treating the Principles as requiring mandatory compliance and calling on all video game companies (not just those named in the coordinated actions) to review their practices and ensure compliance. However, this is not accompanied with any further guidance on how compliance with the Principles can be achieved in the real world, given that a literal interpretation of some of them (such as the requirement to provide pre-contractual information and post contract purchase confirmations for each in-game item purchase) would be unworkable in practice, not to mention deeply undesirable for consumers.
  • We expect more clarity to flow out of these enforcement actions. Until then, the prudent approach for studios and publishers is to review their practices in respect of in-game currencies, and consider how closely they can align with the Principles without fundamentally breaking the game.

Harbottle & Lewis Advises Shareholders of Decoded Limited on Sale to First Intuition

Posted on by Sophie Goodall

Harbottle & Lewis has advised the shareholders of Decoded Limited on its acquisition by FI Group Holdings Ltd, the parent company of First Intuition, one of the UK’s leading professional education providers, and backed by Apiary Capital.

Founded over 15 years ago, Decoded has established itself as one of the world’s leading data and AI capability training businesses, helping organisations build practical AI, data and digital capability. The acquisition brings together two businesses with closely aligned cultures and values, creating a combined offering that enables employers to access financial, data and AI capability training under one roof.

Managing associate Katerina Capras together with associate Elizabeth Compton led on the transaction, supported by associates David Jones and Alexander Vinogradov-Wouters.

On working with Harbottle & Lewis, Decoded founder and CEO Richard Peters commented:

“Completing a transaction of this significance requires advisers who genuinely understand both the commercial and human dimensions of a deal. Tony Littner and the team at Harbottle & Lewis have advised Decoded pretty much since the beginning and were able to provide exactly that. Their support was invaluable in helping us reach this milestone.”

Co-managing partner Tony Littner added:

“I met Richard and the team nearly 15 years ago towards the start of their journey. We advised the company on their initial investment from Mercuri and we have supported them ever since. We feel proud and privileged to have been able to help them on the acquisition and this is a great example of what we love doing as a firm – working with talented entrepreneurs and interesting businesses from inception of an idea through to exit and beyond. We look forward to seeing what this next chapter brings.”

High Court refuses video game developer and publisher interim relief ahead of trial

Posted on by Anna Weeden

A dispute between Victura and Secret Mode came to a head in August 2026, when both parties’ applications for mandatory interim injunctions for full control over the development and publishing of “Six Days in Fallujah” were dismissed.

Each party’s respective ability to use the source code to continue developing the game, and its value to Victura, featured heavily in the Court’s decision.

The development of “Six Days in Fallujah”

“Six Days in Fallujah” is a video game based on real-world events that took place during military action in Fallujah, Iraq, in 2004, which Victura Inc has been developing for the past eight years at a cost of around $50 million (the Game). In October 2025, Victura signed a publishing agreement with Secret Mode Limited and Six Days Holdings Limited (together, the Publisher), under which the Publisher agreed to provide up to $8 million in staged development advances and publish the game, in return for certain publishing rights and receiving a revenue share once the game was completed (the Publishing Agreement). Victura was required to deliver milestones to the Publisher for review, and the Publishing Agreement contained step-in rights allowing the Publisher to take full or partial control of the Game’s development if it found Victura had not addressed the deficiencies of a given milestone after two resubmissions. These step-in rights would (i) entitle the Publisher to develop and publish the Game and (ii) require Victura to share various assets including the Game’s source code.

How did this dispute arise?

Between 31 January 2026 and April 2026, the Publisher rejected Milestone 0.6, both initially and following Victura’s two attempts at resubmission, citing issues relating to “stuck AI” (whereby characters would sometimes implausibly stand motionless, detracting from the gaming experience). On that basis, the Publisher argued it was entitled to exercise its step-in rights under the Publishing Agreement, and that these would take effect on 1 May 2026.

Victura disagreed. It argued the Publisher’s step-in rights were not validly exercised and that the Publisher had intentionally pre-determined its rejection of Milestone 0.6 in order to acquire access to Victura’s source code, which included proprietary and confidential technology for the procedural generation of building layouts. Victura also argued that it had terminated the Publishing Agreement on 29 April 2026.

What were the parties seeking?

Both parties issued claims and – somewhat unusually for this type of dispute – brought applications for interim injunctions. These were heard on 29 and 30 July 2026, to determine whether either Victura or the Publisher should be entitled to the exclusive right to both develop and publish the Game in the period between now and trial:

  • The Publisher applied for an interim injunction requiring Victura to provide certain material to it including source code so that the Publisher could exercise its step-in rights in the period up to trial of the claims on 21 May 2026.
  • On 29 May 2026, Victura applied for an injunction restraining the Publisher from any misuse of Victura’s confidential information and requiring the Publisher to give publishing control of the Game to Victura in the period until trial. Victura also sought an injunction prohibiting the Publisher from taking any further exercise of step-in rights, and requiring the Publisher not to dissipate revenues received from sales of the Game and to hold those in a separate account.

Both Victura and the Publisher accepted that they would need to offer a cross-undertaking in damages to obtain the relief sought.

The High Court’s decision

The High Court refused both parties’ applications, holding that the contractual status quo in terms of the parties’ respective control over the development and publishing of the Game should remain in place. It cited a number of reasons:

  • It found that Victura had the expertise to take full control over the development and publishing the Game until trial, but not the financial resources to do so (nor to meet claims under its cross-undertaking in damages).
  • On the other hand, although the Publisher (i) had the expertise required to develop and publish the Game and (ii) had sufficient financial resources to do so, there was a real risk that it’s taking over the Game’s development would cause a material delay to its launch. The Publisher (or the third-party developer it engaged) would need time to get up to speed and there was a risk that, in this period, the Game could become stale, and the delay might impede the launch. The Court found that, if the Publisher’s claim failed and Victura should, with hindsight, have been free to develop and publish the Game as it saw fit, damages under the Publisher’s cross-undertaking would not be an adequate remedy.
  • The Court also found that, given Victura’s argument that the Publisher deliberately rejected Milestone 0.6 in order to get access to Victura’s source code has not yet been tested, there was a risk that giving the Publisher the source code (which Victura had spent over $50 million developing) would cause Victura irreparable harm. The Court found that this risk was not sufficiently mitigated by the possibility of the Publisher giving an undertaking not to use the source code for purposes other than developing and publishing the Game.
  • More broadly, the Court considered that if either party was given the ability to develop and publish the Game, there may be real scope in the future for the other to complain about that party’s delay and/or poor-quality work impacting the Game’s sales, resulting in further claims under the cross-undertaking in damages. Conversely, refusing the parties’ applications may increase the chance of them resolving their dispute by negotiation, potentially by engaging in mediation.

Read the Court’s decision in full here.

Observations

Cases like this are rare. The majority of disputes between developers and publishers settle long before reaching the courts, and certainly before parties commit the time and expense of applying for interim relief ahead of trial. The fact that both parties sought interim relief at the same time is rarer still and made the Court’s job of applying the ‘balance of convenience’ test an intricate process, requiring a detailed understanding of both parties’ financial positions, their roles in the arrangement and their future capabilities.

In the end, the Court opted to maintain the status quo. The practical effect is that the parties’ rights and obligations under the Publishing Agreement remain in place until trial, leaving the questions of whether the step-in rights were validly exercised, and whether Victura validly terminated the Publishing Agreement, to be determined at that stage (if no settlement is reached before then).

Please get in touch with Ella Ditri or co-head of our interactive entertainment practice, Kostyantyn Lobov, if you have any questions.

Ofcom’s new parental guidance on online video gaming: what it signals for the industry

Posted on by Anna Weeden

On 7 September 2026, Ofcom published guidance directed at parents of children who play online video games.

According to Ofcom’s research, most parents impose some form of restriction on their children’s gaming habits, however many remain concerned about online safety issues. These concerns principally relate to their children interacting with unknown players, encountering violent or otherwise age-inappropriate material and being on the receiving end of in-game abuse or ‘trolling’.

What is Ofcom asking parents to do?

At its core, the guidance encourages parents to take steps in three stages: review the safety settings currently configured on their children’s gaming devices and accounts; have regular conversations with their children about their online gaming habits; and update parental controls in light of what they find.

Interestingly, Ofcom urges parents to verify that the correct date of birth is registered on their child’s accounts. This is important because the UK Online Safety Act’s (“OSA”) requirement to use highly effective age assurance (meaning ID matching, open banking etc.) does not generally extend to mainstream gaming services. This obligation can only trigger where a regulated provider permits “primary priority content” on its service (such as pornographic or suicide-related content), which most gaming platforms do not. In the absence of that obligation, Ofcom is asking parents to step in and ensure a false date of birth has not been used, which is a well-known shortcoming of relying on self-declared age.

Where a player’s true age is reflected on their account, platforms will usually tailor the experience accordingly. For instance, by gating certain social or communication features, disabling loot boxes or filtering out age-inappropriate content such as 18-rated titles.  Ofcom also reminds parents that there is a breadth of parental controls available to them. These include the ability to restrict friend requests and messaging, limit playtime and in-game spend, and adjust privacy controls.

In short, Ofcom is encouraging parents to take a proactive approach in order to help foster a safe online environment for their children. This will be welcomed by the industry, as it signals some recognition by the regulator that responsibility for children’s online safety does not rest solely with platforms, and that parents, too, have a role to play in managing their children’s gaming experiences.

Growing regulatory scrutiny

This guidance arrives at a time when the UK Government is pursuing further legislative measures to protect children in online gaming. As we reported on here in June this year, the Government has announced plans to restrict high-risk features, including the ability for strangers to contact under 16s. For 16 to 17 year olds, that feature is to be switched off by default. Draft regulations are expected before the end of this year, with implementation from Spring 2027.

Separately, on 28 August 2026, Ofcom issued an open letter to all in-scope service providers, emphasising that existing obligations under the OSA remain fully in force even in light of the Government’s announced reforms. The letter makes clear that Ofcom expects compliance with current illegal content and children’s safety duties, stating it will “not hesitate to take enforcement action if services fail to comply with their existing safety duties.”

What does this mean for studios and publishers?

The new parental guidance is a signal that gaming is moving up Ofcom’s agenda. To date, the regulator’s enforcement activity under the OSA has generally concentrated on higher risk services (such as pornography services, suicide forums, social media and file sharing services) and on the deployment of highly effective age verification. This latest publication suggests that the games sector is increasingly in Ofcom’s sights.

Video game companies should ensure they have assessed whether they are in scope of the OSA. Typical features which bring games services in scope include in-game chat, usernames, player profiles, leaderboards, guilds, clans and discussion forums. In its guidance for online video games, Ofcom adopts a broad interpretation of the OSA’s scope, confirming that manipulation of player profiles, avatars, objects, and the environments themselves, are forms of regulated user-generated content.

Companies that are in scope should be: completing or updating their risk assessments and child access assessments; ensuring they have implemented (and recorded in writing) the safety measures set out in Ofcom’s Codes of Practice (or demonstrating that their alternative measures meet the required standards); and complying with other OSA obligations, such as reporting CSEA content.

Companies that are in scope of the OSA should also consider whether their services fall within the scope of the EU Digital Services Act (“DSA”), and in particular, whether they might constitute a hosting service or an online platform. Where they are in scope, there are opportunities to align compliance across these regimes. For example, by using data from DSA Transparency Reports to feed into OSA risk assessments, or by building a content reporting tool that satisfies the requirements of both the DSA and Ofcom’s Codes of Practice.

Platforms that have not already done so may also wish to consider how they can deliver tailored age-appropriate experiences (as opposed to uniform experiences across the userbase).

Finally, while these are relatively new legal frameworks and there remains room for interpretation in how these obligations apply to games services, companies should resist the temptation to wait for greater clarity before acting. Regulators expect to see evidence of genuine, documented compliance efforts. Having a record of the steps taken will place companies in a stronger position if or when Ofcom makes contact.

TikTok Inc v ICO: a preliminary issue decision on personal data processing for artistic purposes

Posted on by Anna Weeden

On 31 July, the Upper Tribunal dismissed TikTok’s argument that its processing of personal data was carried out for artistic purposes and provided guidance regarding the interpretation of “for special purposes” in s 156 of the Data Protection Act 2018 (DPA 2018).

The ICO’s fine and TikTok’s appeal

On 4 April 2023, the Information Commissioner’s Office (ICO) fined TikTok £12.7 million for breaches of data protection law relating to the processing of underage children’s personal data.

TikTok appealed to the First-tier Tribunal on several grounds. It argued that at least some of its platform delivery processing was done for artistic purposes, and that the ICO was prohibited from issuing a penalty notice because s 156 of the DPA 2018 applied. Section 156 of the DPA 2018 requires the ICO to fulfil certain preconditions (namely obtaining court approval) before it can issue a penalty notice “with respect to the processing of personal data for the special purposes”, defined in s 174 as journalistic, academic, artistic, or literary purposes. TikTok claimed its data processing was sufficiently “proximate” to users’ artistic expression that it fell within s 156, and that the ICO had acted ultra vires in issuing the MPN without fulfilling the preconditions.

The First-tier Tribunal determined this challenge should be heard as a preliminary issue, but ultimately dismissed it in June 2025. The Upper Tribunal upheld this decision. In doing so, it provided helpful guidance on how s 156 of the DPA 2018 should be interpreted, and interesting commentary on the nature of TikTok’s data processing:

  • The Upper Tribunal held that the ordinary meaning of “for the special purposes” applied, and that “for” connotes deliberate intention. It dismissed TikTok’s argument that its processing of personal data to facilitate users’ free expression was sufficiently “proximate” to the special purposes (and that there was sufficient directness of purpose) that its processing could be considered “for” the special purposes defined in s 174.
  • The Upper Tribunal dismissed TikTok’s argument that TikTok’s recommender system effectively promoted artistic content because it advantages content made using TikTok’s creation and editing tools, noting that the creation and editing tools can also be used to make non-creative content and the recommender system cannot distinguish between creative and non-creative content. The Upper Tribunal held that “even when the system shares a video that is artistic or has artistic features it cannot do so for an artistic purpose because it is unaware of, and indifferent to, the artistic character of what it is sharing. TikTok is not therefore processing “for special purposes” (even as a subsidiary purpose), even if much of the content hosted on the app is itself artistic.”

Key takeaway

Companies should not assume that s 156 DPA 2018 applies where they process journalistic, academic, artistic, or literary content. In order for s 156 DPA 2018 to apply, the processing of the personal data in question needs to have been conducted directly “for” journalistic, academic, artistic, or literary purposes. If an algorithm is blind to whether content is artistic, it cannot be processing personal data for artistic purposes, even if much of the content being processed is artistic.

If you would like more information, please reach out to one of our lawyers, or if you would like to keep up to date on the latest in data protection, please subscribe to our quarterly newsletter, The Data Download.