The German Games Industry Association (Game) has criticised the Digital Fairness Act (DFA), warning that the legislation creates “double regulation and legal uncertainty” that could significantly harm European developers.
Yesterday, the European Commission presented its draft of the Digital Fairness Act, following an earlier leak. The legislation aims to address practices that exploit or harm consumers in digital markets, including the games industry.
This includes in-game purchases, with specific rules for virtual currency, loot boxes, pay-to-win mechanics, and subscription-based games and services.
Game argued that blanket bans on in-game purchases, especially those involving loot boxes, pay-to-win mechanics, and virtual currencies, threaten the free-to-play market segment. This segment relies on optional in-game purchases and generates a significant share of industry revenue.
Game also highlighted the Commission’s use of vague definitions such as ‘pay-to-progress’ and the overall lack of clarity, which creates legal uncertainty for companies. This concern is heightened by the possibility of fines of up to 6% of worldwide annual turnover.
“With the DFA, the Commission wants to regulate business models down to the last detail,” said Game managing director Felix Falk. “In doing so, it is putting at risk the competitiveness of European games companies, which are already struggling to hold their own globally.”
Falk also raised concerns about age ratings. “If the draft DFA were implemented, the USK and PEGI age ratings, which have successfully worked for decades, would become meaningless, because every game rated below 18 would automatically count as a service aimed at children.
“On top of that, the KIDS Act and Digital Fairness Act contradict each other: when it comes to social media, parents have a say, but with games, the Commission takes that decision out of their hands. This patronises parents and children alike and hollows out Germany’s successful system of co-regulation – a system that the Federal Government and the federal states must now defend at EU level.”
Game is not the only European association to oppose the DFA. In a joint statement, the European Games Developer Federation and Video Games Europe called the proposed legislation “unworkable, unjustified, and disproportionate.”
“Overregulation is a competitiveness problem,” said the statement. “Europe’s 8,700 companies, most of them small studios, will compete with one hand tied behind their backs against rivals outside the EU. That will have a devastating impact on a major European success story and on the millions of players who enjoy their games.”
You can read more about what the DFA means for the games industry here.