EU proposes new rules for loot boxes and influencer ads
The European Commission proposes new rules for consumer protection that target paid loot boxes, random in-game rewards and influencer marketing. The draft of the rule Digital Fairness Act introduces restrictions on some game mechanics that involve miors and require learer disclosures of commercial…
The European Commission proposes new rules for consumer protection that target paid loot boxes, random in-game rewards and influencer marketing. The draft of the rule Digital Fairness Act introduces restrictions on some game mechanics that involve miors and require learer disclosures of commercial content. EU targets paid loot boxes and random rewards Under Article 15 of the proposal, all commerce involving paid variable reward systems, must include a declaration of the features of the rewarded items they offer, including possibilities of their attainment. They should also be provided with means to turn off such functions. These rules will also apply to rewards that are acquired wholly or partially for money or virtual currency. Examples of such systems mentioned in the Commission’s comment are loot boxes, wheels of fortune and collector card packs. The regulator states that they promote unnecessary expenses and have shared features with gambling. The proposal does not state that all loot boxes shall be classified as gambling. If a product is aimed at minors or there is a reasonable basis to presume that minors are using it, additional restrictions shall apply. Under such conditions, paid variable rewards cannot be aimed at minors. Minors will have paid virtual currencies disabled by default and will be allowed to use them only upon receiving parental consent. Stricter disclosure requirements for influencer ads Article 11 of the proposal requires influencers to identify ads and commercial collaboration using the exact same terms. They also have o use tools for commercial content disclosure. This will prohibit influencers to encourage minors directly to purchase products or present not appropriate products to children. The business also need to ensure compliance through contracts or other measures. The draft does not introduce a blanket EU-wide ban on all gambling promotion by influencers. Commission presented the proposal on November 11. The European Parliament and Council must now examine and agree on the text before it can become law.