Failing to protect the online consumer: poor compliance with Dutch loot box and video game consumer protection guidelines

Abstract

Loot boxes are gambling-like products inside video games offering random rewards. Potential harms may result from players overspending. These mechanics are generally not regulable under gambling law and are widely available to children and adults alike, particularly on mobile devices. Countries have been slow to enact regulatory responses. However, pre-existing consumer law may already provide some protection. The Dutch consumer protection regulator published guidelines on how companies should comply when offering in-game purchases generally and loot boxes specifically. Games are required to (i) display a euro price for all in-game offers; (ii) disclose loot box probabilities for each individual outcome; (iii) disclose the presence of generic in-game purchases and loot boxes specifically in app store product listings (and not advertise games containing these as ‘free’); and (iv) not directly exhort children to spend money. Except for one rule (disclosing the presence of generic in-game purchases), compliance was very poor (around 10 per cent or almost nil with most requirements). Besides smaller foreign companies possibly lacking awareness, more reprehensibly, leading companies who almost certainly knew the rules also chose not to comply. Perfect compliance was achieved with one requirement likely because of (i) active enforcement by regulators and (ii) Apple implementing the measure directly into platform design thus significantly reducing the burden on each individual company to comply. Therefore, with support from all stakeholders, better compliance is achievable. However, presently, consumers in the Netherlands are not being properly protected by supposedly strong EU consumer law due to a lack of enforcement from regulators.