CMA launches a consumer law investigation into auto-renewal of online gaming memberships

The Competition and Markets Authority is looking at the practice as used on the Nintendo Switch, Sony Playstation and Microsoft Xbox.

The Competiton and Markets Authority opened an investigation into the supply of online gaming memberships for the Nintendo Switch, Sony Playstation and Microsoft Xbox.

As well as buying consoles and games, people can pay for online services, such as playing against other gamers, communicating with other players, and extra games. These services can involve a membership which is often entered into on an auto-renewal basis. This means that money will be automatically taken from a person’s account as the membership rolls over.

The CMA is concerned about whether some of these companies’ business practices are legal, such as their use of auto-renewals for online gaming contracts, their cancellation and refund policies and their terms and conditions.

The investigation will examine several issues including:

  • are the contract terms unfair, do the companies’ terms give them wide discretion to change the quality of the deal, for example, by reducing the number of games included or increasing the price?
  • how easy it is to cancel or obtain a refund, are there any factors that make it difficult for people to cancel their contract or get their money back?
  • how fair is the auto-renewal process? - are customers clearly told that their membership will be rolled over, are they regularly reminded that they are on a roll-over contract before further payments are taken, and is auto-renewal set as the default option?

The CMA has not yet reached a view as to whether or not the companies have broken consumer protection law.

Published: 2019-04-05T18:00:00

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