Europe's CPC targets King, Supercell, Mojang and others over virtual currencies

Europe's Consumer Protection Cooperation Network is taking "coordinated actions" against a string of top games companies as it looks to investigate compliance with 'Key Principles' on in-game virtual currencies announced last year.

The CPC is a network of national authorities responsible for the enforcement of EU consumer protection laws. It has asked Activision Blizzard, Crytek, InnoGames, King, Mojang, Plarium, PLR Worldwide Sales, Riot Games, Supercell and Ubisoft to bring their commercial practices in line relating to in-game virtual currencies.

Games being assessed include Hunt: Showdown 1896, Forge of Empires, Candy Crush Saga, Minecraft, Mech Arena, Gardenscapes, Valorant, Clash of Clans, For Honor, Diablo Immortal and Call of Duty Mobile.

The games were selected for assessment by the CPC Network "in the context of a wide-scale market compliance check due to broad reach, cross-device accessibility, and varied age ratings, all of which amplify the impact of the practices on consumers".

It's not clear what, if any, 'Key Principles' have not been adhered to prior to the CPC Network opening its investigations.

The CPC Network said failure to address its concerns raised could lead to enforcement measures by national authorities. It's not clear whether any such action would be enforceable under current EU consumer protection laws.

Virtual currency rules

The move follows the announcement last year of ‘Key Principles’ for virtual currencies in games. This called on publishers to display the real cost of microtransactions. Specifically, publishers were asked to:

• Provide clear and transparent pricing and pre-contractual information;
• Avoid practices hiding the costs of in-game digital content and services, as well as practices forcing consumers to purchase virtual currency;
• Respect consumers’ right of withdrawal;
• Respect consumer vulnerabilities, in particular when it comes to children.

Following the publication, the CPC Network and European Commission said they invited the games industry to present “concrete actions” to comply with them. Discussions did not result to a satisfactory result, it said, leading to today's announcement.

It was claimed that a “high number” of games companies have not made any substantive changes to their titles following the publishing of CPC Network’s public guidance or “extensive talks” over recent years.

Star Stable Entertainment has already faced action over the alleged lack of transparency in Star Stable Online. The CPC claimed the company violated rules by offering direct exhortation to children in advertisements, offering a lack of clear and transparent information, and using pressuring techniques such as time-limited practices to “unduly influence” children to make in-app purchases.

“The CPC Network will continue to take joint enforcement actions, where appropriate, to address practices that do not comply with EU consumer protection legislation," read a statement.

"On this basis the CPC Network calls on all companies active in the video gaming sector to review their practices and address any compliance issues, in particular those raised in the existing CPC Network common positions and any subsequent one which will be disclosed in the future."

What it really means

Flux Digital Policy director of policy and public affairs Celia Pontin told PocketGamer.biz the CPC Network's princples on in-game currencies have been contentious from the start. Video Games Europe and the European Games Developer Federation had referred to them as “new legal theories and misguided interpretations of EU consumer law".

"The main root of this is that the CPC considers in-game currencies to be on a par with fiat currency, whereas the industry points to a long-standing legal view that they are just a kind of digital content – this difference matters when it comes to how in-game currencies are sold and used," explained Pontin.

"There are also concerns about the viability of the Principles, with some of the requirements being unworkable for some (very legitimate) contexts or creating a risk of making situations less clear for consumers.

"Importantly, the CPC Principles themselves are not legislation; they are a set of guidelines from the regulatory enforcement network. And that’s in the Principles document itself - on the final page there’s a footnote stating that compliance with the recommendation is not a guarantee of compliance with the law and, crucially, that 'not respecting the recommendations contained in this document cannot be automatically considered unlawful'. That’s why the disagreement about their interpretation of the law is so important."

Pontin added that, from the press statements given, it's unclear what the CPC is doing.

"It says that it carried out a market check of compliance with the Principles and identified several games requiring ‘further assessment’, as well as their intention to request changes to commercial practices around in-game currency.

"Nothing specific has been identified as an issue and no-one has been found to have breached the law. It’s also important to note that any changes a company might make during the course of an investigation does not mean that their original approach was non-compliant.

"If someone is found to be in breach, the consequences depend on an awful lot of factors – the enforcement framework of the relevant Member State, the specific issue being investigated, whether or not changes are agreed, and others."

However, Pontin noted that the CPC has stated its intention to set a precedent for the future with these cases.

"With the Principles being so closely aligned to the expected position of the upcoming Digital Fairness Act, this precedent could go far beyond the Principles and potentially influence the law itself."

Following today's announcement, Michael McGrath, Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection, said the industry must ensure that its games do not expose players, especially children, to harmful or unfair practicies.

"The game must be fair, and the rules must be respected. National authorities, with the support of the Commission, will make sure they are enforced."

You can read the announcement from the European Commission here.

Regulation and digital policy will be hot topics at our upcoming shows like Pocket Gamer Connects Nordics on October 20th to 21st and PGC London on January 18th and 19th.

We recently analysed Europe's incoming regulations, like the EU Kids Act and Digital Fairness Act, in our latest newsletter.