Gaming giants under fire for exploiting children’s spending habits

Several major gambling companies have been accused of deliberately exploiting children’s vulnerability and creating financial dependency through aggressive marketing practices and business models. Fairplay, a US-based organization, is now calling for stricter rules to protect minors.

Together with the Center for Digital Democracy, Fairplay has filed a complaint against several gaming giants, including Epic Games and Activision Blizzard. The companies are accused of deliberately designing their games to manipulate children into spending large sums of money on microtransactions.

The organizations find the use of virtual currencies, such as V-Bucks in Fortnite or FC Points in the soccer game FC, particularly troubling and concerning.

Players use real money to buy the virtual currency, which is then supposed to be spent in the game itself. According to Fairplay, the design and marketing of the games is particularly targeted at young users, who are less likely to understand the consequences of their purchasing decisions.

Encouraging impulsive buying

Sinan Akdag is the international secretary of the Swedish Consumers’ Association, an independent, non-profit organization that “aims to be the main watchdog for consumers”.

– The only reason we can see is that they are trying to hide the real costs of the purchases from consumers, says Sinan Akdag in an interview with TT.

The complaint alleges that game companies use so-called “loot boxes” and other mechanisms that trigger addictive behavior, causing children to make frequent and often impulsive purchases in the games.

The practice has drawn strong criticism from several consumer groups, who argue that these business models are unethical and potentially harmful to children and teens.

Ingen lek – så luras små barn spela bort stora pengar. Det är titeln på vår nya granskning av de populäraste spelapparna, som publiceras i dag. I samband med den går vi även vidare med en KO-anmälan. @ErikSlottner @Konsumentverket @Sinan__Akdag https://t.co/SBXGenxwQ2

— Sveriges Konsumenter (@SvKonsumenter) March 14, 2024

The industry evades regulation

Gaming companies often require users to agree to terms and conditions in order to make purchases, such as the ability to remove or change content at any time. The regulations surrounding these purchases are circumvented by claiming that the player is only buying a license to use the virtual currency. Therefore, when the currency is used for in-game purchases, no rules apply.

– Then the game companies mean that the rest of consumer law also flies out the window, says Akdag.

The organizations are demanding that purchases be reported in local currency, that games’ default settings turn off purchases, and that unfair terms be removed.

– Almost the entire gaming industry uses these marketing methods. Right now, we want the consumer protection network to look at these seven games. But we want to see new rules and regulations for the entire industry.

Criticism of loot boxes and microtransactions has intensified in recent years, and several countries are now considering introducing stricter laws around these features.

Some European countries, such as Belgium and the Netherlands, have already banned the boxes for being too similar to gambling.

Fairplay and other organizations behind the complaint now hope that the US regulator, the Federal Trade Commission (FTC), will urgently investigate and take action against the gambling companies’ business practices.