Nine Video Game Companies Are Under Investigation in Europe. Here Is What the Cases Are About.

European consumer authorities have launched nine formal investigations into video game companies over their use of virtual currencies. The investigations are led by the Dutch Authority for Consumers and Markets and coordinated through the Consumer Protection Cooperation Network, which brings together consumer authorities across EU member states.

The companies and games involved

The nine companies under investigation are Crytek, InnoGames, King, Mojang, Plarium, PLR Worldwide Sales, Riot Games, Supercell, and Ubisoft. Games under scrutiny include Hunt: Showdown 1896, Forge of Empires, Candy Crush Saga, Minecraft, Mech Arena, Gardenscapes, Valorant, Clash of Clans, and For Honor.

Separately, European authorities are also engaging with Activision Blizzard over Diablo Immortal and Call of Duty. That action covers a broader set of concerns including virtual currencies, addictive design features, parental controls, direct marketing to children, the availability of pre-contractual information, and the blocking of gaming accounts.

What the investigations are about

The core concern is straightforward. In-game purchases are presented to consumers in virtual currencies, diamonds, coins, tokens, and similar units, rather than in euros. According to the ACM, this obscures the real-world cost of purchases and makes it difficult for consumers to track their spending.

The problem is compounded by how virtual currencies are sold. Currencies are only available in bundles, and the size of those bundles rarely matches the price of individual in-game items. Consumers end up with leftover currency after each purchase, which increases the likelihood that they will make further purchases to use it up. According to the authorities, the boundary between gaming and real-world money is deliberately blurred.

Martijn Ridderbos, Member of the Board of ACM, put it plainly: "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."

What the investigations cover

Consumers should be able to understand the real-world cost of in-game purchases and virtual currencies before completing a transaction. The use of virtual currencies or currency exchanges should not make prices difficult to understand. Consumers should not feel pressured to purchase excessive amounts of in-game currency to progress or enjoy a game. Consumers should receive clear information before making purchases. Consumers should be informed of their right to withdraw from contracts within 14 days, including for unused virtual currency. All terms and conditions must be fair, clear and easy to understand. Games should include appropriate safeguards for children and other vulnerable consumers.

The authorities note specifically that minors are even less able than adults to resist these practices, and that the risks for young people are a particular concern.

What preceded the investigations

The European consumer authorities did not move directly to formal investigations. Last year, they held extensive discussions with the gaming sector about the changes required and assessed the proposals the sector put forward. According to the authorities, those proposals did not sufficiently address the identified problems, and no large-scale changes followed in the games themselves. The formal investigations are the result of that process.

The broader regulatory picture

The investigations sit within a wider regulatory push targeting the gaming sector. The network of European consumer authorities has also pointed to the prevalence of dark patterns in video games and direct encouragement to children to make in-game purchases, for which the ACM previously imposed a fine on a gaming company. Loot boxes remain a separate area of concern.

The European Commission is currently working on the Digital Fairness Act, an update to European consumer law. The ACM has submitted input recommending that the Act include a ban on loot boxes and virtual currencies in games played by minors. The ACM notes that these rules would be necessary in addition to the DSA, which does not apply to most video games, and the recently proposed EU Kids Safety Act.

The decision to conduct the investigations jointly across European consumer authorities reflects the cross-border nature of the gaming market. The same games are played across different European countries, and the authorities consider it important that the rules are interpreted consistently across the EU.

Link to source: https://www.acm.nl/en/publications/acm-and-other-european-consumer-authorities-step-action-protect-gamers-against-deception

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