Ilkka Paananen, CEO of Tencent Owned Clash of Clans And hay day developer Supercell claims that the upcoming European Union (EU) Digital Fairness Act (DFA) will “break the way many games work.”
European Commission President Ursula von der Leyen proposed developing a DFA in mission statement published December 2024
She said the law must combat “unethical practices and commercial practices associated with dark patterns, influencer marketing on social media, addictive digital product design and online profiling, particularly when consumer vulnerabilities are exploited for commercial gain.”
The EU says the DFA is particularly concerned about the protection of minors online and will provide “clear” advice that can be easily and effectively implemented.
It will also attempt to address issues identified during the Digital Justice Suitability Test (published by the Commission in 2024), which argues that video games that are monetized using virtual items and in-app currencies can harm consumers by distorting the value of in-app transactions, encouraging them to spend more than intended.
The Digital Fairness Fitness Check said there were also “serious concerns” about loot boxes and their perceived similarities to gambling, marketing practices associated with virtual items, and the potential losses consumers could suffer if games containing their virtual purchases were shut down.
As it stands, the EU believes it has not passed legislation that specifically regulates “addictive design or certain features such as virtual items or in-app currency.”
However, it also acknowledged that there are differing views on how to address the issues raised by the digital justice suitability review, although many parties agreed that “the acceptable boundaries of addictive design need to be made clearer in the legal framework and through guidelines.”
“Consultations on the Digital Fairness Act must include genuine industry participation.”
Having published its findings, the European Commission started open consultations about the DFA so that interested parties can share their ideas on how to shape the legislation.
At the same time, Paananen published an open letter in which he argues that the value of the European video game industry is “at risk” as the DFA will attempt to “disrupt” mechanics that have become fundamental to driving growth.
Although the DFA is still in the final stages of development, Paananen says the rules are proposed by the Consumer Protection Cooperation Network (CPC), a network of national government law enforcement agencies created to protect EU consumers (thank you Practical Law) – will completely eliminate in-app purchases and digital currencies, turning the process of buying and spending in video games into a “bureaucratic nightmare.”
Paananen suggests that the in-game currency is simply tokens that can be purchased at theme parks to access rides and other attractions. He says the approach is “convenient and exciting” for consumers because it helps them avoid “repetitive cash transactions.”
Following this comparison, he suggests that the CPC Network and DFA should abandon this simple process and implement new rules that will leave consumers feeling “frustrated and disillusioned.”
“Under the rules of the CPC network, every time a player uses an in-game token (which happens millions of times a day and works the same way as theme park tokens), companies will have to treat each such use as a separate financial transaction, requiring extensive legal processes,” he writes. “Meanwhile, the upcoming Digital Fairness Act risks turning these recommendations into law, ruining the experience for players and their families.”
Paananen argues that companies like Supercell, which relies heavily on free-to-play game monetization methods, have already made consumer protection a top priority. For example, he claims that the company no longer encourages long gameplay after 45 minutes in its online action game. Brawl Stars.
“Every decision we make is based on our mission to provide players of all ages with a fun, healthy and safe experience,” he adds.”[…] If we don't do that, we know the players will spend their time elsewhere.”
Notably, Paananen argues that the proposed rules could decide the future of the entire video game industry in Europe, and called on his colleagues to speak out and work constructively with EU decision-makers to ensure that Europe “remains a continent where digital industries thrive.”
“Instead of introducing sweeping rules that will harm the industry and fail to protect gamers, we should strengthen the existing framework that already puts European gamers first,” he continues.
“This will mean that consultation on the Digital Fairness Act must include genuine industry participation. As dialogue with the CPC network evolves, in-game currencies are now rightfully recognized as digital content under current law and should not be classified as “digital representations of value.” Most importantly, any new rules must be based on facts, not hypotheticals, and be proportionate to the harm.”
