Decoding the BEUC’s Grievance Over In-Game Purchases

From 2012 to 2015, when free-to-play mobile games were gaining popularity, regulatory interest in Europe peaked.

The UK’s Advertising Standards Authority was frequently ruling against the promotion of ‘free games’, the EU’s CPC Network published its initial framework on consumer protection in online gaming, and a case concerning child exploitation in Runes of Magic reached Germany’s highest civil court.

Over the past seven years, European lawmakers have chiefly focused on loot boxes. The ongoing discussion regarding whether they should be more rigorously regulated under gambling laws, child protection laws, or broader consumer protection regulations continues to this day.

However, the last few months have indicated a significant shift in the European Union’s approach to consumer protection.

In September of this year, the European consumer organization BEUC (short for its French title, ‘Bureau Européen des Unions de Consommateurs’) released a report that examines certain in-game spending practices.

Specifically, the BEUC report sharply criticizes the use of premium currency, particularly regarding purchases by children and adolescents. Below, we delve deeper into some of the purported concerns highlighted by the BEUC report.

1. Parental controls have developed into a sound framework – yet continue to evolve

The BEUC report claims that children are often spending money in games without their parents’ awareness or consent – the article referenced in the report (Glimpse ‘Children Who Wasted Thousands of Dollars on Gaming‘, published by Grunge in 2023) compiles articles originally published between 2013 and 2016.

This statement doesn’t imply that this issue has been fully eradicated. However, evidence suggests that its prevalence is declining; for instance, the latest survey from Video Games Europe showed a real drop in spending by children on games.

This is not a gaming-specific problem (see for example here and here). Reducing the risks of unauthorized spending depends on platforms and payment providers to continue to implement effective parental controls – and importantly, for parents to actually use them.

As noted in last year’s report by the Swedish Consumers’ Association, password protection on purchases “overall… provides a satisfactory level of security,” and the suggested further technical protections at the platform level would indeed mean that Apple and Google need to enhance their existing core controls. Recently, neither has stood still – for example, Google introduced its new ‘school time‘ controls this August.

2. The framing of premium currency does not represent many games accurately

The BEUC report specifically targets the use of ‘premium currency’ (as explained above). However, the report fails to emphasize that many games actually utilize ‘mixed currency’ – in-game currency that can also be earned through gameplay or purchased.

The UK’s Committee of Advertising Practice recognizes this distinction, explicitly reiterating its standpoint in its latest update to the Guidance on marketing in-game purchases (“in many games, the currency can be earned in-game and also purchased as a top-up for in-game use… where a virtual currency can be earned in-game, the storefront falls outside its remit, regardless of whether the currency can also be purchased”).

Reducing the risks of unauthorized spending depends on platforms and payment providers to continue to implement effective parental controls – and importantly, for parents to actually use them.

This complicates BEUC’s suggestions regarding subsequent purchases of virtual goods being marked with a ‘real money’ label. In fact, BEUC itself points out that there may be instances where the actual price cannot really be determined.

This also sets games apart from the cited TikTok commitments, where the use of Money can even be used to acquire items for content creators, which can then be converted into Diamonds and subsequently into real money.

A more comprehensive approach might be to evaluate how the economy and gameplay function as a whole and whether this is fairly communicated to the player, considering:

• Whether it is clear to the player how much currency they possess, how much a virtual item costs in-game currency, and how much in-game currency they would need to acquire it (if any), as outlined in the CAP’s Guidance on marketing in-game purchases; and
• Whether it is clear how that currency can be obtained other than through purchase – i.e. that all options (e.g. earn, play, wait, or complete) are equally accessible to the player, as described in the OFT’s Principles for online and app-based games, which was referenced by the EU’s CPC Network in its December 2013 Common Position.

Another critique by the BEUC regarding premium currency is that it lessens the ‘pain of paying,’ thus encouraging greater expenditure by players. However, the research mentioned here is specific and focuses solely on total spending via credit cards (with the fundamental research predating the implementation of in-game purchases).

As it stands, there appears to be only one piece of research linked to premium currencies on this topic. No research, seemingly, addresses mixed currency.

3. Premium currency as digital goods versus a form of payment

The BEUC report also investigates whether premium currency should be classified as a “means of payment” under EU consumer regulation rather than ‘digital goods’. Currently…