EU Commission proposes Digital Fairness Act with loot box and virtual currency rules

The European Commission, the EU's main executive body, released a proposal this week for the Digital Fairness Act (DFA). If adopted, it would apply to all EU member states and cover video games and other digital services. Game Developer reports that it could change how some games are developed and published well beyond Europe. The full proposal runs 71 pages.

The headline priorities include a ban on manipulative marketing, clearer pricing rules, and options for players to turn off addictive design features. The proposal also covers limits on practices that encourage overspending, disclosure of influencer marketing, limits on personalized ads and pricing aimed at minors or using sensitive personal data, and easier cancellation of digital contracts and subscriptions. The focus is on free-to-play games, but premium games that use similar mechanics may also be affected.

On monetization, companies would have to show the real-money value of virtual currencies within EU countries. For any product targeting a minor, virtual currencies would be off by default and could only be turned on when a parent or guardian signs in to approve them. Loot boxes could not be sold to minors at all. Adults could still buy them, but the types of items, the probabilities and similar details would have to be shown before purchase.

Some parts are less clear. The proposal forbids in-app purchases that are "necessary" for progress for minors, as a pay-to-win restriction. Game Developer notes that the wording is not defined, and that it is unclear whether adults could buy such items or what developers should do in games where minors and adults play together. On addictive design, consumers would be able to disable push notifications not triggered by user activity and engagement streaks that reward constant return visits. That list is not fixed, so the Commission could add to it.

Game Developer also points to the question of whether a game is directed at or used by minors, with age ratings expected to carry significant weight. That could push developers toward higher age ratings to avoid scrutiny. It adds that publishers could make EU-specific versions, but running and balancing several versions is a lot of work, so EU rules could end up shaping international versions too.

The European Game Developer Federation, which represents 2,500 game studios in Europe, and the trade lobby Video Games Europe issued a joint statement when the DFA leaked last week. They called it "game over for the European games industry" and argued the protections duplicate existing regulation and would undermine it. The statement also says the DFA treats any game rated below PEGI 18 as targeting children, which they say moves decisions from parents and children to the Commission.