Half of all EU citizens between the ages of six and sixty-four play video games and, in addition, the video game industry provides over 90,000 jobs in Europe. Sales from and in video games are increasing every year and there is no sign of slowing down. It is therefore not surprising that politicians are keeping an eye on the branch that is growing economically, intends to fertilize it and perhaps want to cut back a few rampant side branches.
The fact that this has not happened long ago is not only due to the slow grinding of the bureaucratic-democratic machinery. Video games are still considered a niche for nerds, even if the numbers paint a very different picture. But you no longer want to look the other way and sit out the strange trend. For this reason, the European Parliament is expected to adopt an initiative report on the regulation of video games on January 18, 2023, with a focus on consumer protection.
First of all, an own-initiative report is not legally binding. This is because the EU Parliament does not have the right to initiate legislation, which at EU level rests entirely with the EU Commission. However, through an own-initiative report, Parliament can force the Commission to deal with an issue. The commission is then usually required to draw up a legal draft on this basis, or to present a reason in the event of rejection. The report itself has been with the Committee on the Internal Market and Consumer Protection since February last year, where 38 members of the EU Parliament have thought about how regulations in the sense of consumer protection could look like.
Of course, there is a lot to do with the protection of children, but general data protection should also be improved. And the required regulation of monetization in video games is particularly noteworthy.
Because the report is about as exciting to read as As you would expect from a political committee, we have summarized the most important information for you here.
protection of children
Especially for the protection of children, the Committee on the Internal Market and Consumer Protection calls for a series of regulations that are intended to uphold the rights of minors. At the same time, there should also be more power for parents.
Point 9 of the own-initiative report notes that some games are based on content created by gamers, including children. This is not a new phenomenon, but it is coming to the fore with games like Roblox and establishing the question of the exploitation of minors.
Furthermore, under item eleven, there is a wish for ways for parents to gain more control over their children’s play. On the one hand, this is about complying with age restrictions, but on the other hand it is also about maximum playing times, both offline and online, and restrictions when it comes to payment systems. However, such a system should not be developed by the EU. Instead, the EU Parliament addresses this paragraph to the industry, which it sees as responsible. In the political context, there should be more information about existing systems.
Point 41 of the report, under which Parliament calls for PEGI to be made the uniform system of European age classification, could have drastic consequences for German legislation. The system is already used in 38 countries in the European Union, but Germany still relies on the USK. The entertainment software self-regulation classifies games with a different focus than the bodies of the Pan European Game Information. So lead in Germany violent content faster to a higher classificationbut here you see sexual content as less harmful to young people.
Furthermore, it could be interesting for the protection of minors in games that the committee in the appendix to its report calls for a kind of EU-wide identification system on the Internet in which data remains protected and minors are denied access to inappropriate content.
Privacy for everyone
The EU Parliament is considering several points where it sees a need for greater data protection. Point 22 calls for more transparency. On the one hand in the distribution of chances when buying loot boxes and on the other hand in all algorithms used. This information should reflect exactly why which data is collected and be formulated in understandable language.
Finally, point 38 calls on the countries to pay very close attention to data protection. In particular, behavioral data should be protected, which is particularly suitable for binding players to a title. Such mechanics carry the risk of becoming addictive to players. An example where such mechanisms occur is in matchmaking systems such as Engagement Optimized Matchmaking.
Monetary offers under the magnifying glass
The EU already published in 2020 a study on loot boxes and its effect on consumers. It was actually only found out that loot boxes should not be considered as gambling. Instead, the study recommended that these mechanics should be viewed from a consumer protection perspective. Thus finer adjustments could be made than a ban on minors or even a total ban. This is to prevent excessive intervention in the market. For further regulations, the EU Parliament calls on the Commission to carry out further analyzes and to find a uniform regulation for Europe.
Points 15 and 16 are both based on existing EU law, according to which the use of so-called dark patterns is prohibited and may not be used in video games either. Dark patterns describe a type of advertising that leads people to buy products they would not have actually spent money on. This can be very aggressive, but also manipulative and misleading advertising.
Furthermore, it is already EU law that the prices for virtual items in in-game shops must also be displayed in euros so that players have an accurate idea of how much they are currently spending on a microtransaction. Under point 19 of the own-initiative report, Parliament again calls for the case law to be more effective in the event of non-compliance.
However, according to point 21, the protection of consumers with subscription models is not yet a law. Here Parliament is calling for a regulation that enforces that subscription models are never automatically renewed unless the consumer explicitly requests it. Say an opt-in procedure.
Point 23 points out that providers have to comply with the European return guidelines and that downloads can always be exchanged if there is a problem. Clearer information for consumers is required here.
Probably the most striking point in the list is point 25. The EU wants to intervene directly in player behavior here. All trading of virtual objects for real money should be prohibited. How far this ban should go has not been clarified. However, there will probably be a government restriction on websites where players resell items they have looted in video games. Above all, this should put a stop to gold farming and prevent exploitative and human rights-violating behavior.
Economic boom for video games in Europe
In addition to umpteen regulations, the EU is demanding a strategy that makes Europe more attractive as an economic location for game developers. She also brings in a first concrete idea, which is somehow nice, but probably has more symbolic character. An annual industry award is to honor a European developer at a ceremony. Even with a hefty prize money, that won’t persuade a studio to switch seats, but like the rest of the claims, there’s still a lot of mystery here.
You can tell that the Committee on the Internal Market and Consumer Protection has given some thought and obviously consulted the right advisors who actually have a clue about video games. But what will emerge from this remains to be seen. And of course that doesn’t happen overnight. Instead, from the moment the own-initiative report is voted on, a period of at least one year should be expected before the Commission actually has a legally binding draft law in its hands, which can then be voted on.
