European gaming firms say new EU consumer rules will ‘cripple’ the industry
The EU's Digital Fairness Act clamps down on video-game practices where players are encouraged to spend real money to keep playing.
European gaming firms have criticized new EU consumer regulations, claiming they would "cripple the competitiveness of Europe's world-leading video games industry." The European Commission introduced a series of rules on Wednesday, including the Digital Fairness Act, which aims to protect consumers by limiting certain practices within the video-game industry for the first time.
Under the proposed Digital Fairness Act (DFA), video games would be prohibited from earning revenue through micro-transactions - known as pay-to-win or pay-to-progress - for minors. Additionally, restrictions are in place on "loot boxes," which allow players to purchase randomized virtual items using real money. The law also mandates that in-app virtual currencies must be disabled by default for users under the age of 18.
Commissioner for Consumer Protection, Michael McGrath, emphasized the need for the European gaming industry to continue thriving while advocating for practices that foster creativity, innovation, and quality rather than exploitation of consumers. The proposed DFA could carry penalties of up to 6% of global revenue for any violations affecting more than two-thirds of the EU population.
In a joint statement, the European Game Developer Federation and Video Games Europe, which includes major companies like Sony and Epic Games, argue that the DFA's definition of pay-to-win is "fundamentally flawed" and creates confusion as it could encompass any in-game purchase. Currently, Europe is home to developers of some of the world's most popular games such as Angry Birds and The Witcher, with gaming spending in the bloc reaching €27 billion in 2021, accounting for 17% of the global market.
The gaming groups highlight that the industry already employs effective self-regulation through parental controls and the PEGI content rating system, which the DFA fails to acknowledge. The DFA, they argue, effectively shifts all decision-making from parents and children to the Commission, which they believe is inappropriate.
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