The EU Commission has published a draft for the proposed EU KIDS Act. While the most controversial stipulations – namely a ban for under 13’s and restrictions for under 15 year old kids – only apply to social networks and video sharing platforms – others also apply to online games. If approved, the rules would apply to all online games sold in EU territories, and introduce significant restrictions to common online features – the definition is extremely broad and could be held to cover everything from Roblox to the multiplayer mode of a disc-based game. Here is a first analysis.
Providers of online games shall, in particular, ensure that excessive use by minors is not encouraged. This means that, for example, login bonuses or loss of benefits when not playing for a certain time will often be prohibited – it’s possible that there may prove to be a compliant way to incorporate such features, but it’s clear that they are viewed unfavourably no matter what. These criteria have recently been of increasing relevance for age ratings under the PEGI and USK systems, but what the KIDS Act proposes is less nuanced and may pose difficult questions for example for persistent worlds.
The draft Act also states that contact between minors and other users must be restricted. In order to fulfil the new obligations, parental controls and age assurance solutions must generally be implemented by providers of online games (it be may be that this is not required for titles that do not contain any of the features which would be problematic for kids) but the requirements are less strict than for social networks.
There is also a provision on Codes of Conduct on age rating and online games – the recitals make reference to PEGI, but the Act goes beyond the existing framework and is more binding. .
The KIDS Act also re-packages an old foe of the games industry: “Minors playing online games should benefit from transparency as to the real monetary value of transactions carried out through virtual currencies and variable reward systems.” The latter seems to refer to lootboxes – the former to the discussions which are at the core of the BEUC Report and the CPC Key Principles.
Interestingly, the draft is contradictory on this point: for games this appears only in the opening recitals (which explain the reasoning behind the law) and not in the operative text, where the economic transaction rules are expressly limited to online social networking services and video-sharing platform services. This leaves open whether the omission is a drafting oversight or a deliberate choice to address monetisation transparency for games solely through the code-of-conduct mechanism, which itself is only referenced in the recitals in this context.
The KIDS Act is designed to be a regulation which will apply directly in the EU member states. The proposed text is not final, it must still be approved by the Parliament and the EU Member States.
Dr Andreas Lober is a partner with ADVANT Beiten and advices leading games companies inter alia on youth protection, and consumer law.