Game over for business practices in the online gaming industry?
With the global growth of video gaming, the Competition and Markets Authority (CMA) has launched an investigation into industry giants Nintendo, Sony and Microsoft, amid concerns that some of their business practices are unfair for consumers.
The CMA is seeking to understand whether certain business practices in the industry are lawful. The main concerns are around the use of auto-renewals for online gaming contracts, cancellation and refund policies and their terms and conditions. In most cases, once you sign up as a member, money will be taken automatically from your account as the membership rolls over on a weekly, monthly or annual basis. The CMA wants to understand whether the terms are transparent and whether it is difficult for consumers to cancel or get a refund.
The investigation into the business practices
The investigation will examine several issues, including:
• whether the contract terms fair – do the terms give wide discretion to change the quality of the deal, for example, by reducing the number of games included or increasing the price?
• how easy it is to cancel or obtain a refund – are there any factors that make it difficult for people to cancel their contract or get their money back?
• how fair is the auto-renewal process – are customers clearly told that their membership will be rolled over, are they regularly reminded that they are on a roll-over contract before further payments are taken, and is auto-renewal set as the default option?
The CMA has not reached a view as to whether or not any of the current practices amount to a breach of consumer protection laws, although it has said it will take action if necessary.
