Debunking the BEUC Complaint Against In-Game Purchases

The period between 2012 and 2015 saw a surge in the popularity of free-to-play mobile games, which in turn sparked intense regulatory interest in Europe. The UK's Advertising Standards Authority frequently ruled against the marketing of 'free games', while the EU's CPC Network published its stance on consumer protection in online games. A notable case involving the direct solicitation of children in Runes of Magic even reached Germany's highest civil court. However, over the past seven years, the focus of European policymakers has shifted towards loot boxes, with ongoing debates about whether they should be regulated under gambling legislation, youth protection laws, or broader consumer protection laws. Recently, the European consumer group BEUC published a report criticizing certain in-game purchase practices, particularly the use of premium currency, which it claims is often used by children and teenagers without their parents' knowledge or consent. The report cites an article titled 'Kids Who Wasted Thousands of Dollars on Gaming' to support its claims, although this article is a compilation of stories from between 2013 and 2016. While it is true that unauthorized spending by children is a concern, evidence suggests that its importance is diminishing, with a recent survey by Video Games Europe indicating a decrease in spending by children on video games. This issue is not unique to the gaming industry, and mitigating the risks of unauthorized spending relies on platforms and payment providers to implement effective parental controls. The BEUC report specifically targets the use of 'premium currency', but fails to acknowledge that many games use 'mixed currency', which can be earned through gameplay or purchased. The UK's Committee of Advertising Practice recognizes this distinction, stating that in-game currency that can be earned through gameplay is outside the remit of advertising regulations. BEUC's suggestion that subsequent purchases of virtual items should be presented with a 'real money' price is challenging, as the report itself acknowledges that there may be situations where the real price cannot be calculated. A more holistic approach would be to assess the game's economy and gameplay as a whole, considering factors such as whether it is clear to the player how much currency they have, how much a virtual item costs, and how currency can be obtained. The BEUC report also criticizes the use of premium currency for reducing the 'pain of paying', thereby increasing player spending. However, the research cited is limited and focuses on general spend on credit cards, with no consideration of mixed currency. The report explores whether premium currency should be classified as a 'means of payment' under EU consumer law, but the Digital Content Directive clearly does not apply to in-game currencies, as they do not have real-world value. In-game currencies are tied to the game ecosystem and cannot be used to purchase other goods and services. The Commission's Guidance on the Consumer Rights Directive supports this definition, highlighting that in-game micro-transactions are typically classified as digital content or services. To prevent issues arising around in-game purchases, games companies should focus on education, research, and next steps. Education involves ensuring that players and parents are aware of available controls, while research is needed to better inform policy-making in this area. The games industry is entering a new era of regulatory attention in the EU, with the BEUC report summarizing key arguments submitted to the European Commission as part of a complaint against seven games.