The European Commission has published its long-awaited proposal for a Digital Fairness Act (DFA), which it describes as a major update of EU consumer protection rules designed to make sure that consumers enjoy the same high level of protection online as they do offline. Alongside it, the Commission proposed a revision of the Consumer Protection Cooperation (CPC) Regulation that would, for the first time, give the Commission itself powers to investigate and fine businesses up to 6% of worldwide annual turnover in large-scale cross-border cases.
Few sectors will need to study the DFA more closely than video games, and the proposals have proven highly controversial with industry bodies such as Video Games Europe. Several of the headline measures will directly affect existing video game mechanics and monetisation models: virtual currencies, in-game spending prompts, progression mechanics, influencer promotion and subscriptions all feature. Below we look at what the proposal contains, what it could mean in practice for games businesses, and why UK studios and publishers cannot afford to treat this as purely an EU matter.
What is in the proposal?
The Commission summarises the key proposals of the DFA as follows:
- a ban on manipulative "dark patterns" likely to distort consumer behaviour;
- clear and transparent pricing, in particular for purchases made with virtual in-app currencies and where dynamic pricing is used for cultural and sports events;
- "fairness by design", including an option for consumers to switch off addictive design features that encourage excessive or compulsive spending, such as persistent prompts;
- a ban on gambling-like features for minors, with "pay-to-win" and "pay-to-progress" given as examples;
- clear disclosure of influencer marketing, and protection against exploiting the trust of minors in an influencer's audience;
- restrictions on unfair personalised advertising and pricing that targets minors or exploits sensitive data;
- easier cancellation of digital contracts and subscriptions, and an end to unwanted automatic renewals and free trials that turn into "subscription traps"; and
- a right to deal with a human in customer service, and clear rights where consumers use AI agents to buy on their behalf.
The proposals come with teeth. The proposed CPC revision would allow the Commission to investigate large-scale cases with a major impact on consumers across the Single Market directly, with fines of up to 6% of worldwide annual turnover. Non-EU businesses would also have to appoint a legal representative in the EU to cooperate with national authorities and the Commission. For global publishers, this means a single, central enforcer with significant fining powers.
We consider below some of the key points to note for the games industry.
Virtual currencies
Pricing transparency for virtual currencies continues a direction of travel already set by EU consumer authorities (most notably the CPC – see our recent article here). In that sense, it is not surprising to find it reflected in the DFA proposals, but it is a significant change to the way in which virtual currency transactions are currently conducted across the industry.
Article 14 of the DFA will require a trader offering virtual items for sale using their own paid for virtual currency to indicate the corresponding monetary value (or estimated monetary value) of those virtual items. In other words, it will become necessary to show the equivalent price in real money on game storefronts selling in-game items. That is precisely one of the requirements contended for by the CPC Principles, and which is the subject of existing CPC enforcement action.
When a game is directed at minors, virtual currencies will also need to be disabled by default, so that they can only be activated upon parent or guardian approval. Recital 62 states that a game is directed at minors, in particular, when its PEGI age rating indicates that the product is suitable for use by persons under the age of 18. This suggests that any game with virtual currency transactions to be enabled by default will now require an 18+ rating.
Addictive design
The "fairness by design" concept is potentially the most far-reaching for the sector. This is reflected in Article 17 by a new right to turn off features that are intended or can reasonably be foreseen to encourage compulsive or excessive use. The game must make available, in an easily accessible manner, effective tools enabling such features to be turned off individually or all at once. The industry has been aware the potential for regulation of such features for some time, but there has been uncertainty regarding what an addictive design feature looks like.
Article 17(1) (which can be amended in the future) provides a degree of certainty by listing specific features, including automatic play of content and uninterrupted content consumption, and features incentivising engagement at regular times or with greater frequency. Online multiplayer games which automatically move from one match to the next or which provide XP for logging in are examples of the mechanics which could be potentially caught by this definition.
The full list of addictive design features listed in Article 17(1) is:
- features enabling automatic play of content and uninterrupted content consumption without effective and regular interruption moments that enable deliberation by the consumer on their willingness to consume more content;
- notifications not triggered by, or not directly related to, the consumer's interaction or activity on the service;
- features incentivising engagement at regular times or with greater frequency, including through penalties or loss of benefits for failing to engage regularly or within specified time intervals;
- features and system behaviours that encourage continued use by simulating interpersonal relations, such as persistent prompts to continue engaging with an automated system.
Dark patterns
Another familiar concept dealt with in the DFA is that of dark patterns. Article 10 prohibits traders from designing, organising or operating their online interfaces, including visual, auditory and other components thereof, in a manner that is likely to deceive or manipulate consumers, or in a manner that is likely to otherwise materially distort the economic behaviour of consumers.
This will be highly relevant to the design of online games and Annex I of the DFA contains a list of patterns, which in all circumstances are to be regarded as unfair. The list includes the following:
- Making false claims about the availability or the popularity of a product, or not clearly
and unambiguously disclosing relevant qualifications about the availability or popularity
of that product. - Persistently displaying statements throughout the ordering process about the availability
or popularity of a product or promotional offer to create an impression of scarcity. - Using default options which the consumer is required to reject or otherwise inferring the
consent of the consumer to payment for an additional product, a different quantity of the
product or a different product. - Presenting the option to decline an invitation to purchase or to continue the supply of a
product as the wrong choice. - Creating the false impression that the consumer does not have any other option apart from
the prominently featured option. - Persistently requesting that consumers make a choice or change their choice where that
choice has already been made, where this is not necessary for the trader to comply with legal
requirements. - Using misleading or ambiguous language in the presentation of choices to consumers,
including by reversing the linguistic or framing logic within a list of choices, or using double
negatives. - Presenting the price or, where applicable, information about the duration of the contract
and its automatic renewal, in an invitation to purchase with less prominence than other items
of material information. - Sending or displaying to the consumer notifications that falsely suggest that another
consumer, the trader or a third party has contacted the consumer, or that something requires the
consumer's attention. - Making the steps required to refuse, withdraw or change a choice disproportionately more
numerous, complex or time-consuming than is reasonably necessary,
Minors and gambling-like mechanics
The proposed ban on "gambling-like" features for minors is significant, not least because the Commission's examples, pay-to-win and pay-to-progress, go beyond the loot box debate that has dominated discussion to date. The DFA describes these mechanics as "spending-maximising" practices, to which minors are particularly exposed.
Article 15 deals with so-called variable reward systems, also known as loot boxes. These mechanics will not be permitted at all in games directed at minors. In 18+ games, consumers will need to be informed about the types of products or virtual items available in loot boxes, and the probability of obtaining them. They will also need to be provided the option to turn off loot boxes altogether.
Article 16 deals with the prohibition of pay-to-win and pay-to-progress mechanisms in games directed at minors. Recital 65 states that such mechanisms may include artificial difficulty barriers, progression speeds that render the unpaid path illusory, or competitive structures in which outcomes are effectively determined by expenditure.
A lot of popular multiplayer games already limit in-game purchases to aesthetic items such as skins, which do not affect game progression. However, for games which do wish to use such progression mechanics, the only practical option for ensuring a level playing field will be to adopt an 18+ rating.
What about the UK?
Following Brexit, the DFA will not apply in the UK as such. However, UK studios and publishers that sell to players in the EU will be within its scope, and the proposed requirement for non-EU companies to appoint an EU legal representative is aimed squarely at businesses established outside the bloc. In practice, many games are built and monetised for a single global audience, so EU requirements on design and pricing are likely to shape products played in the UK too.
Domestically, the UK has already strengthened its own regime: the Digital Markets, Competition and Consumers Act 2024 gave the Competition and Markets Authority power to enforce consumer law directly and impose substantial fines, and introduced new subscription contract rules due to come into force from January 2027. Games companies operating in both markets should aim for a joined-up approach rather than treating the UK and EU as separate compliance projects, while watching for divergence as the DFA progresses.
Next steps
The proposal will now be debated by the European Parliament and the Council, and its detail may change before it is adopted. Even so, the direction of travel towards increased compliance obligations is clear. Games companies would be well advised to proactively start auditing their potentially impacted mechanics and considering changes which may be required during the next design cycle.
If you would like to discuss what the Digital Fairness Act could mean for your business, please get in touch with Laura Harper, Aaron Trebble or the Lewis Silkin Interactive Entertainment team.
