Digital Fairness Act draft proposes loot box and pay-to-win restrictions

The European Commission has published a draft of the Digital Fairness Act. The proposed legislation aims to protect online consumers from unfair practices and manipulative designs.

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Under the draft, gaming companies would need to show the real-world monetary value of virtual items bought with in-game currency. Loot boxes and other paid variable reward systems must clearly display the items available and the probability of obtaining them. The Commission says pay-to-win and pay-to-progress mechanics would be prohibited for minors. While the draft targets these mechanics for younger players, the Commission is not planning a general ban on microtransactions for adults.

The act also targets "dark patterns," such as fake warnings about low stock levels used to create artificial purchase pressure. Features that encourage compulsive consumption must be able to be deactivated by the user. For subscription services, the draft calls for easier cancellation processes and protections against automatic renewals following free trials.

Marketing rules would change as well. The Commission says influencers must clearly disclose sponsored content, and brands would be responsible for enforcing these disclosures. Additionally, companies based outside the EU would be required to appoint a legal representative within the Union.

Serious violations of these rules could result in fines of up to 6% of a company's annual worldwide turnover. The Commission estimates the act could save European consumers up to 13.7 billion euros per year. These rules are not yet binding, as the European Parliament and the Council must still review the proposals.