The European Commission, the main executive body of the European Union, released this week a proposal for the Digital Fairness Act (DFA). The act, which would apply to all EU member states, puts crosshairs on video games and other digital services across Europe with restrictions on features loot boxes, virtual currency, and UX design.
The full act proposal,which can be read here, suggests a series of consumer protections that are causing controversy in parts of the the industry. The full proposal is 71 pages, but the highlighted priorities include a ban on manipulative marketing tactics, clear and transparent pricing rules, requirements that lets players turn off addictive design features, restricting practices to encourage overspending, clear disclosures on influencer marketing, restricting personalized ads and pricing that target minors or leverage sensitive personal data, and making digital contracts and subscriptions easier to cancel.
While those are the key headlines, there is some specific detail in the proposal that can have far-reaching effects for games, with a prominent focus on free-to-play titles but may also apply to premium games that use a lot of the same mechanics. Under the act as currently proposed, companies will be required within EU countries to display the corresponding real-money value of virtual currencies. For any product targeting a minor, virtual currencies will be disabled by default, and can only be activated if a parent or guardian signs in to approve it.
Moreover, loot boxes will be banned from being sold to minors at all. While adults can buy them, new rules about transparency—types of items, probability, etc.—will require that information to be shown before those adults can buy them.
Not every part of the act proposal is that black-and-white, however. A prohibition on pay-to-win mechanisms for minors outlines that in-app purchases that are “necessary” for progress are forbidden for minors. But it’s not clear what that wording specifically means definitionally, nor is it obvious if adults can buy such things, or what developers are supposed to do in mixed-age games where both minors and adults play. In a situation where both minors and adults are competing but only adults can buy items that give them an advantage, are developers simply forced to unbalance their competitive games?
Addictive or compulsive design is also being examined by the DFA, which requires that consumers can disable things like push notifications not triggered by user activity or engagement streaks that incentivize constantly returning to the game. This list is not bound by its initial adoption, so the European Commission could add to it if developers are inventing new ways to circumvent the regulations.
How would this new law impact game developers?
While it’s possible for publishers to make different versions of games for Europe and other regions—alternative content-sensitive versions for different regions already exist—it is no minor amount of work to run and balance multiple versions of games. The possibility also exists, then, for regulations in Europe to affect all international versions of a title, as well.
The large concern with the DFA will come down to whether game is directed at minors or used by minors and how targeting one is being done at the exclusion of other audiences. Age ratings are planned to be a pretty significant weight for that designation, but that could have the knock-on effect of incentivizing developers to pursue higher age ratings to avoid scrutiny.
The video game industry in Europe has offered concerns about the DFA. The European Game Developer Federation, which represents 2500 game developer studios in Europe, and Video Games Europe, a trade lobby representing developers and major publishers in Europe, put outa joint statement when the DFA leaked last week. Calling it “game over for the European games industry,” the statement does not mince words, arguing that the proposed protections are redundant with existing regulations and would only undermine them.
The statement also points out that the DFA defines any game that is rated below PEGI 18, the European ratings board’s designation for games appropriate for people above the age of 18 only—a shorthand equivalent of the ESRB’s M-rating—as targeting children.
“Effectively, the DFA moves all decisions from parents and children to the Commission,” the statement reads.
In the next steps for the DFA, the European Parliament and Council discusses the proposal before it is formally voted on. During that discussion, amendments and changes can be brought forward by concerned parties.
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