Various EU consumer bodies including BEUC and national bodies have made a formal complaint to EU authorities about alleged unfair practices by leading video game companies which make games such as Fortnite, EA Sports FC 24, Minecraft and Clash of Clans.
BEUC’s analysis has concluded that traders breach EU consumer protection laws and so has called on EU authorities to ensure that traders comply with the rules and provide consumers with safe gaming environments.
In 2020, in-game purchases generated approximately €46 billion, representing about a quarter of revenues in the video game market. In recent years, video game companies have increasingly relied on in-game purchases in their business models, including in-game currency.
BEUC has described how the video game industry tries to maximise spending by using premium in-game currencies. The BEUC and its members have argued that:
- Consumers cannot see the real cost of digital items, leading to overspending: the lack of price transparency of premium in-game currencies and the requirement to buy extra currency in bundles can push consumers to spend more.
- Companies’ claims that gamers prefer in-game premium currencies are misguided. Many consumers can find this step misleading and often prefer buying items with real money
- Consumers can be denied their rights when using in-game premium currencies, which are tied to terms which can favour game developers
- Children are likely to be particularly susceptible to these features. According to data, children in Europe spend an average of €39 per month on in-game purchases. 84% of 11-14 year olds play video games. Whilst they are playing the most, they have limited financial literacy and are more likely to be influenced by virtual currencies.
The potential issues highlighted also apply to social media and other marketplaces. The BEUC claimed in 2021 that TikTok was unclear on how much its virtual currency was worth and argues better enforcement of the consumer law framework in the video game sector and further regulation in the coming years is essential.
In-app purchases have been controversial for many years. Back in 2014 both the UK Office of Fair Trading, as it then was, and the European Commission issued guidance about in-app purchases and the CMA took enforcement action. The Advertising Standards Authority has also issued guidance about how they are presented, which was reviewed earlier this year. Loot boxes have also proven to be controversial.
