Level Up Compliance: Video games industry in the spotlight (again) for consumer law compliance

Introduction

The gaming industry has experienced exponential growth in the past few years. It is estimated that, in 2025, the UK games market will generate revenues of £13.28 billion^[1] whilst the EU games market will reach €63.70 billion.^[2] However, such growth coupled with the popularity of certain games with children is bringing heightened regulatory scrutiny for the industry.

In-game currencies in particular are under the spotlight. In September 2024, the European Consumer Organisation, BEUC (“BEUC”), submitted an alert to the European Consumer Protection Cooperation Network (“CPC Network”) and European Commission alleging that video game companies are engaging in unfair commercial practices designed to maximise consumers’ spending in breach of EU consumer protection laws.

In March 2025, the CPC Network published controversial key principles on in-game virtual currencies, which are designed to promote transparency and fairness in the online gaming industry’s use of virtual currencies. However, these “industry-changing principles” have unsurprisingly been met with resistance and criticism from the industry.

At the same time, the CPC Network, coordinated by the European Commission, launched enforcement action against the Swedish game publisher, Star Stable Entertainment AB (“Star Stable”), due to concerns that one of its games popular with children, Star Stable Online (“SSO”), features practices which breach EU consumer law.

Whilst this action relates to the EU, the issues and principles are very similar in the UK. Indeed, back in 2013, the Office of Fair Trading, the predecessor to the Competition and Markets Authority (“CMA”), launched an investigation into online and app-based games which focused on commercial practices which were potentially misleading, aggressive or unfair. This led it to publish guidance setting out principles for online and app-based games. 

Issues Identified by the CPC Network in Relation to Star Stable Online

The CPC Network identified the following practices as non-compliant with EU consumer law:

i) Ads urging children to buy

The CPC Network found that Star Stable made direct appeals to children in ads urging children to buy, or persuade adults to buy for them, in-game currency or items. An example given by the CPC Network of a practice considered a direct exhortation to children is a pop-up which said: “Get 30% Off Star Rider! [...] Buy now”. The CPC Network also indicated that less explicit techniques and messaging could also, in its view, constitute a direct exhortation to children and breach consumer law.

ii) Time-limited events and offers

The CPC Network found that Star Stable used “pressuring techniques” such as time-limited offers to unduly influence children to purchase in-game virtual currency or content. Beyond pressuring tactics within SSO itself, the CPC Network highlighted how offers were often marketed by the company ahead of time on Instagram, thereby enhancing the pressure on children once they were made available. An example given by the CPC Network was an Instagram post which included: “Double Star Coin Weekend. Saddle up for a limited-time offer! […] Grab this two-fold treat before May 27 15:00 UTC!”.

iii) Lack of clear, transparent and fair information

The CPC Network found that Star Stable fails to provide clear, transparent and fair information, adapted to children, about buying and using in-game virtual currency, leading users to spend more than they intend to. The CPC Network identified several issues with the bundles offered by Star Stable, including that:

• the predetermined virtual currency bundles do not match with the value of purchasable in-game items meaning that users are prevented from choosing the exact amount of Star Coins they wish to purchase and, consequently, make it more likely they will purchase more than they need to; and
• the lack of price information in mixed bundles means it is not clear how much Star Coins cost when bundled with in-game items.

Further, several practices were considered non-compliant because they blurred the true cost of an item, for example, because a price was only displayed in Star Coins and not real world money.

iv) Lack of commercial content disclosures

The CPC Network found that Star Stable failed to take appropriate steps to ensure that influencers promoting their products clearly disclosed commercial content and did not unduly influence children with their marketing techniques. As an example, it provided an Instagram post in which an influencer part of Star Stable’s affiliate programme included “(ad)” at the end of a promotional post’s caption, which, however, was only displayed to the user if they clicked “read more”.

Star Stable was given one month to provide a written response addressing the issues highlighted and to propose commitments to remedy them.

The CPC Network’s Key Principles on In-game Virtual Currencies

To address concerns raised by BEUC regarding the unfair practices of leading video game companies, at the same time as announcing its investigation into Star Stable, the CPC Network published key principles on in-game virtual currencies which it has said would be considered a “minimum requirement” for game developers.

The CPC Network set out its position that virtual currencies the main or primary purpose of which is to be a method of payment are “digital representations of value”. The consequence of this is that both the purchase of in-game currency and subsequent purchases made with it are subject to EU consumer law requirements. This position is likely to meet with fierce resistance from the industry as it departs from the practices currently employed by many games publishers and adds materially to the compliance burden.

The key principles are:

1. Price indication should be clear and transparent. The price in real-world money of in-game digital content should be provided to consumers in a clear and comprehensible manner in order to allow them to make an informed purchasing decision. The price should be indicated based on what the consumer would have paid in full, without applying discounts or promotional offers.
    
2. Practices obscuring the cost of in-game digital content and services should be avoided. For example, mixing different in-game virtual currencies to purchase in-game items or requiring several exchanges of virtual currency to make a purchase should be avoided.
    
3. Practices that force consumers to purchase unwanted in-game virtual currency should be avoided. For example, in-game virtual currency should not only be offered in bundles which do not match the value of purchasable in-game items (e.g. bundles of only 660 or 1400 gems should not be offered if 750 gems are required to purchase an item).
    
4. Consumers should be provided with clear and comprehensible pre-contractual information. This applies to any offer to purchase in-game virtual currency or items (whether with real world money or in-game currency) and includes information on the:
   1. main characteristics and real-world value of the item;
   2. identity and contact details of the trader selling the item;
   3. existence and conditions of the consumer’s right of withdrawal;
   4. legal guarantee of conformity for items; and
   5. payment and delivery methods.
       
5. Consumers’ right of withdrawal should be respected. This includes informing consumers of this and, where applicable, enabling them to exercise it within 14 days of purchase. For content to be exempt from this, consumers must expressly consent to using the content or service immediately and acknowledge they will lose their right of withdrawal. This can be done in a single click, but must be separate from the one to make the purchase (e.g. the “buy” button). Confirmation of the purchase must also be provided, including the consumer’s express consent and acknowledgement.
    
6. Contractual terms should be fair and written in plain and clear language. This includes the terms and conditions of the video game and any terms relating to the purchase of in-game virtual currency or items. They should also not cause a significant imbalance in the parties’ rights and obligations to the detriment of the consumer. For example, terms giving unreasonable unilateral rights to traders should be avoided.
    
7. Game design and gameplay should be respectful of different consumer vulnerabilities. For example, if a game features virtual currency, it should ensure not to exploit vulnerabilities during gameplay. Gameplay should also be designed so that the commercial element of in-game advertisements is sufficiently clear and distinguishable from the gameplay itself. Parental controls should also be used which, for example, disable the ability to spend real-world money in the video game.

The CPC Network has noted it will “monitor progress and may take further actions if harmful practices continue”.

In response to the publication of the above principles, the European Game Developers Federation and Video Games Europe have expressed disappointment in the CPC Network’s alleged lack of engagement before publishing the principles. They have noted they will conduct a “thorough legal assessment of the principles and will seek further engagement with the CPC Network”.  

Conclusion

The small print to the key principles states that implementing the recommendations in the key principles is “no guarantee for compliance with the legal requirements. Likewise, not respecting the recommendations contained in this document cannot be automatically considered unlawful”. The key principles are not legally binding but give a clear indication of how the regulators interpret and apply the consumer law rules to video games. 

Compliance with the key principles will inevitably require significant changes to game design, game economies and marketing practices. The trade associations will no doubt have stepped up their lobbying efforts in recent weeks to try and mitigate the impact of some of the new guidelines – and given the potential impact these principles could have on revenues for gaming companies, it would not be surprising if legal action testing the CPC’s approach ensues if common ground between the industry and the European Commission cannot be found. 

That said, in light of the significant fines which can be levied for breach of consumer law in the UK and EU, video games companies – especially those with games popular with children – would be well advised to audit their customer journeys across the UK and EU against the new principles now to identify where changes may be required and undertake a thorough risk assessment.  

The European Commission will further examine these topics during the forthcoming consultations on the Digital Fairness Act, where new rules for in-game currencies and purchases are expected, and so the heavy scrutiny faced by the industry is only likely to continue.

Article co-authored by Lisa Franco, Trainee Solicitor at CMS