Debunking the BEUC Complaint Against In-Game Purchases

Between 2012 and 2015, when the free-to-play mobile gaming market was booming, European regulatory bodies were at the height of their interest. 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, and a case involving the direct solicitation of children in Runes of Magic reached Germany's highest civil court. For the past seven years, the primary focus of European policymakers has been on loot boxes, with ongoing debates about whether they should be regulated under gambling legislation, youth protection laws, or broader consumer protection laws. However, the past couple of months have marked a significant shift in the European Union's focus on consumer protection, with the European consumer group BEUC publishing a report targeting certain in-game purchase practices. The report criticizes the use of premium currency, particularly in relation to purchases made by children and teenagers. A closer examination of the report reveals that it relies on outdated articles, such as 'Kids Who Wasted Thousands of Dollars on Gaming', which was published between 2013 and 2016. Although this issue has not been completely eradicated, evidence suggests that its significance is diminishing. For instance, a recent survey by Video Games Europe found that children's spending on video games has actually decreased. Mitigating the risks of unauthorized spending relies on platforms and payment providers to deliver effective parental controls, which parents must use. As highlighted in last year's report by the Swedish Consumers' Association, password protection on purchases provides a satisfactory level of protection, and suggested technical protections on a platform-level would essentially mean that Apple and Google have parity in their existing core 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 understands this distinction, and its recent update to the Guidance on advertising in-game purchases reiterates that in many games, currency can be earned in-game and also purchased as a top-up for in-game use. This makes BEUC's suggestions around subsequent purchases of virtual items being presented with a 'real money' price challenging, as the real price may not be calculable. A more holistic approach would be to assess how the economy and gameplay work as a whole and whether this is fairly presented to the player. This includes considering whether it is clear to the player how much currency they have, how much a virtual item costs in in-game currency, and how much in-game currency is needed to purchase it. 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 the key research predating the existence of in-game purchases. The BEUC report explores whether premium currency should be classified as a 'means of payment' under EU consumer law instead of 'digital content'. Currently, 'virtual currencies' under the Digital Content Directive are only considered to be a 'means of payment' if they are a 'digital representation of value' recognized by national law with real-world value. Recital 23 of the Digital Content Directive clearly does not apply to in-game currencies, as they do not have real-world value and are tied to use within the game ecosystem. In-game currencies cannot be used to purchase other goods and services like a recognized virtual currency would. This definition is used to capture officially issued virtual currencies, such as central bank digital currencies, which are distinct from in-game currencies. The Commission's Guidance on the Consumer Rights Directive refers to the 'payment of a price' to include instruments with a 'certain convertible or monetary value'. Additionally, it highlights that in-game micro-transactions would normally be classified as digital content or digital services. The legal status of such transactions is well established, and games have been built around this accordingly. There are three key areas where games companies need to remain vigilant to help prevent issues arising around in-game purchases: education, research, and next steps. Ensuring that players and parents are aware of the controls available will continue to play a key role in giving consumers the experiences they want. More research is needed to better inform policy-making in this area, including topics such as virtual currency and the 'pain-of-paying'. The games industry appears to be entering a new era of regulatory attention in the EU, with the BEUC report summarizing the key arguments submitted to the European Commission as part of a complaint against seven games.