Digital Fairness Act Unpacked: Specific Features in Digital Products – particularly those common in Video Games

What are the “specific features in digital products” addressed by the consultation?

The European Commission addresses specific alleged concerns about certain features in digital products, such as in video games. As examples of these features, the consultation mentions the following:

• “exchanging in-game currency” – virtual objects used in many gaming ecosystems that can be obtained with real money (and/or via gameplay) and are then exchanged in the game for other in-game items;
• “uncertainty-based rewards” (e.g., “loot boxes”) – where consumers pay either with real money or in-game currency for a chance to receive randomised items or benefits; and
• “pay-to-progress and pay-to-win mechanisms” – where in-game advantages can be obtained for real money or via in-game currency.

According to the European Commission, these features can raise consumer protection issues because they may encourage excessive spending, particularly when users (including minors) do not fully understand the real-world costs involved.

What is the European Commission discussing to address these concerns?

The consultation seeks to determine whether additional measures should be considered to address these concerns – such as non-regulatory measures (e.g., guidance), new binding rules, or more effective enforcement of existing rules. In this regard, the Commission specifically inquires whether the respondents are in favour of the following suggested actions:

• Should the price of an in-game item also be expressed in real-world currency, such as Euro, when this in-game item is offered in exchange for paid in-game currencies (e.g., coins, diamonds)?
• Should there be more transparency concerning the odds of winning when obtaining in-game items with uncertainty-based rewards (e.g., “loot boxes”, card packs, access to levels with rare rewards)?
• Should consumers have more control over certain features of digital products, such as video games, by having the ability to turn off features such as the exchange of virtual currencies, virtual items with uncertainty-based rewards, pay-to-progress and/or pay-to-win mechanisms?
• Should certain digital product features be prohibited for minors (and if yes, which)?

Two of these contemplated actions in particular deserve to be examined in more detail:

a) In-game Currencies & Price Transparency

In-game currencies are virtual objects used in many gaming ecosystems to create a compelling and varied gaming experience. As they form an integral part of the gameplay, in-game currencies also share the legal nature of the game itself (i.e., digital content). They can be obtained with real money (and/or sometimes via gameplay) and then exchanged in the game for other in-game items. In many cases, no corresponding value in real money is shown for this exchange of one virtual item against another as part of a game. This frequently fuels debates about price transparency and potentially “decoupled” payment behaviour.

When exchanging in-game currency for other in-game items, there is currently no explicit legal obligation to display the corresponding value in real money. It is heavily debated whether such obligation only exists if a transaction exists, i.e., if an item is acquired in exchange for real money, or whether in-game currency must be considered an equivalent to real money (so-called digital representation of value). The exchange of in-game currency for in-game items does not constitute such a transaction if it is merely an exchange of digital content.

National case law from various EU Member States, such as Austria[1], Germany[2] and the Netherlands[3], states that in-game currency should not be treated as a currency but rather as digital content under the Consumer Rights Directive, emphasising its lack of monetary or convertible value. Despite its name, in-game currency is neither genuine currency nor comparable to it, as it cannot be used outside the specific game. Legally, in-game currencies have been treated as digital content rather than a digital representation of value for years – but there appears to be a recent shift on the enforcement level which pre-empts these discussions in the context of the DFA to some extent.

The Commission asks whether the price of an in-game item should also be expressed in real-world currency when this in-game item is offered in exchange for paid in-game currencies (i.e. in-game currencies obtained with real money and not via gameplay).

b) User Control & Deactivation Options

A key concern for the European Commission is that users should have greater control over digital products, especially regarding embedded monetisation mechanisms.

In the consumer protection framework, there are currently no specific requirements governing the possibility to deactivate individual digital elements. Many of the monetisation mechanisms named by the Commission can already be voluntarily configured by providers even in the absence of statutory requirements – and there is always the option for consumers not to engage with such mechanisms – even without a technical opt-out function.

The European Commission is asking for opinions on whether users should have more control over digital products by being able to deactivate certain features – for example, the exchange of in-game currency, uncertainty-based rewards, or pay-to-progress/pay-to-win mechanisms.

A blanket demand to enable the deactivation of certain mechanics poses significant challenges for the industry. From a technical standpoint, not every function can currently be separated in a modular way. Moreover, deactivating some elements – depending on how closely integrated they are into the game’s ecosystem – could fundamentally alter game design or the overall gameplay experience, not only for individual users but for everyone playing the game.