New Game Industry Legislation 'Digital Fairness Act' Proposed to Regulate Virtual Currency Usage

Form and Objectives of the Digital Fairness Act

The Digital Fairness Act is proposed as a European Union Regulation, meaning it will directly apply across all EU member states without requiring national transposition. It will partly override existing national unfair commercial practice laws and is designed to complement the ongoing EU KIDS Act, which is also expected to have an important effect on the gaming sector.

Key Provisions Affecting Game Developers

The Act prohibits dark patterns in online interfaces, with a blacklist defined and expandable by the European Commission. It bans profiling-based targeting and personalized pricing for minors. Paid virtual currencies must be disabled by default for products directed at minors and can only be activated with parental or guardian approval. Loot boxes are banned for minors; for adults, companies must disclose item types and probabilities and provide effective disablement options.

The law also forbids pay-to-progress and pay-to-win mechanics for minors, although some definitions and implications remain unsettled. Games must enable players to disable features that promote compulsive or excessive usage, including autoplay, unsolicited push notifications, regular engagement incentives like login rewards, and features simulating interpersonal relationships to extend use time.

Consumer Protection and Contract Rules

Subscription-based games and services face new contract fairness measures. Free trials require explicit user consent before converting to paid contracts, with clear information on trial endpoints, termination, and renewal. Online contract termination and withdrawal functions must be available, making cancellation as simple as subscription. Customer service must include human support upon request.

Enforcement and Industry Impact

The Act carries penalties of up to 6% of global annual turnover for violations and will apply 12 months after entering into force. Minors are defined as under 18, and whether a product is directed at or used by minors is determined by objective indicators including age ratings. This may incentivize developers to pursue higher age ratings to avoid restrictions.

The Act aims to harmonize EU-wide regulations, reducing complexity from differing national laws. It includes strict transparency requirements for influencers. The European Commission perceives current industry measures as insufficient for consumer and child protection, motivating this comprehensive regulation.