ACM and other European consumer authorities to step up action to protect gamers against deception

The European consumer authorities have launched nine investigations to ensure that videogame companies use virtual currencies in their games in a fair manner, and to prevent gamers from being misled. The nine videogame companies involved are Crytek GmbH; InnoGames GmbH; King.com Operations (Malta) Limited; Mojang AB; Plarium Europe S.à.r.l.; PLR Worldwide Sales Limited; Riot Games Limited; Supercell Oy, and Ubisoft EMEA SAS. This has been announced in a joint statement that the Consumer Protection Coordination Network (CPC), the European network of consumer authorities, published on 30 September.

The costs of in-game purchases (for example upgrades, avatars, skins, and weapons) are often presented in online games in other forms than euros, for example in diamonds or coins, as a result of which it is not clear to gamers that such in-game purchases involve real-world money, and how much they actually cost. The European consumer authorities are extra concerned about the risks thereof for youth.

Martijn Ridderbos, Member of the Board of ACM, adds: “If you spend in-game currency, you spend real-world money. The way in which a video game company uses virtual currencies in games cannot result in situations where you, as a consumer, are put on the wrong track. Video game companies cannot use deceptive tricks that result in unforeseen costs for individuals.”

Led by ACM, the European consumer authorities last year held extensive discussions with the gaming sector about the required adjustments, and they assessed the sector’s proposals. This has not resulted in proposals by the sector that sufficiently solve the identified problems, nor has it led to the necessary large-scale changes in video games. That is why the European regulators have now decided to take formal steps in order to ensure that the video game sector complies with the rules, and have therefore launched investigations into major competitors in the gaming industry. Some of the games that these companies have produced are Hunt: Showdown 1896; Forge of Empires; Candy Crush Saga; Minecraft; Mech Arena; Gardenscapes; Valorant; Clash of Clans; For Honor. In addition, investigations into the producers of the games Diablo Immortal and Call of Duty Mobile (Activision Blizzard/Microsoft group) and Star Stable (Star Stable Entertainment) had already been launched, and are still ongoing.

What is this case about?

As the amounts of the in-game purchases are not presented in euros, consumers lose track of their expenses. This results in unintentional expenses and financial harm (for households), because the boundary between gaming and real-world money is deliberately blurred. In addition, consumers are forced to spend more money on in-game currencies since those currencies are only sold in bundles, while the prices of in-game purchases seldom match the size of the bundles on offer. Consumers thus always end up with leftover currency, as a result of which they are more likely to make new in-game purchases. These practices are all the more problematic since many minors, too, play video games. And these minors are even less able than adults to resist such practices.

Wider consumer problems in video games

The network of European consumer authorities also points to the prevalence of other consumer problems in video games, such as the use of ‘dark patterns’ (psychological tricks to influence behavior), and direct exhortations to children to make in-game purchases, for which ACM had previously imposed a fine on a gaming company. The use of ‘loot boxes’ (virtual items with gambling elements), too, raises concerns. These problems are part of ACM’s actions against the sector.

Tightening of the rules necessary

The European Commission is currently working on an update of European consumer law (through the Digital Fairness Act). ACM’s input for that Act included a call for clarification and tightening of the rules that apply to video games. For example, ACM recommends banning the use of loot boxes and virtual currencies in video games, especially when those games are played by minors. These rules are necessary, in addition to the already existing Digital Services Act (which does not apply to most video games), and the recently presented proposals for an EU Kids Safety Act.

Cooperation at the European level

The European consumer authorities opted for a joint action, since video games are the same in different European countries. And it is also important for the gaming industry that the rules are interpreted in the same way across the EU. In that way, a level playing field for gaming companies is realized.

The European consumer authorities and the European Commission work together in the Consumer Protection Coordination Network (CPC). The goal of this network is to ensure that businesses that are active in different European countries comply with the consumer protection rules, and to take effective action, if businesses do not comply with those rules. In addition, the different member states are able to call for help from each other when combating cross-border violations.