Ilkka Paananen, the CEO of Tencent-owned Clash of Clans and Hay Day developer Supercell, claims the European Union’s (EU) forthcoming Digital Fairness Act (DFA) will “break how many games fundamentally work.”
European Commission president Ursula von der Leyen proposed the development of the DFA in a mission statement published in December 2024.
She said the legislation must tackle “unethical techniques and commercial practices related to dark patterns, marketing by social media influencers, the addictive design of digital products, and online profiling, especially when consumer vulnerabilities are exploited for commercial purposes.”
The EU claims the DFA is particularly concerned with protecting minors online and will deliver “clear” guidelines that can be easily and effectively enforced.
It will also attempt to address issues unearthed by the Digital Fairness Fitness Check (published in 2024 by the Commission), which claims video games that monetize using virtual items and in-app currencies might harm consumers by distorting the value of in-app transactions to encourage them to spend more than intended.
The Digital Fairness Fitness Check states there are also “significant concerns” surrounding loot boxes and their purported similarities with gambling, marketing practices related to virtual items, and the potential losses consumers might endure when games containing their virtual purchases are shut down.
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As it stands, the EU feels it hasn’t rolled out legislation that specifically regulates “addictive design or specific features such as virtual items or in-app currencies.”
It also, however, conceded there are diverging views as to how address the concerns raised in the Digital Fairness Fitness Check, although multiple parties have agreed the “acceptable boundaries of addictive design should be made clearer in the legal framework and through guidelines.”
“The Digital Fairness Act consultation must include genuine industry engagement”
After publishing its findings, the European Commission has launched an open consultation on the DFA so interested parties can share their ideas on how to shape the legislation.
At the same time, Paananen has published an open letter in which he claims the value of Europe’s video game industry is “under threat” because the DFA will attempt to “dismantle” mechanics that have become fundamental to driving growth.
Although the DFA is still being finalized, Paananen claims regulations proposed by the Consumer Protection Cooperation (CPC) Network— a network of national public enforcers established to protect EU consumers (thanks Practical Law)—will completely torpedo in-app purchases and digital currencies by turning the act of buying and spending within video games into a “bureaucratic nightmare.”
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Paananen suggests in-game currencies are simply akin to tokens that can be purchased at theme parks to access rides and other experiences. He claims it’s an approach that is “convenient and fun” for consumers because it helps them avoid “repeated cash transactions.”
After making that comparison, he suggests the CPC Network and DFA will dismantle that straightforward process to implement new rules that will leave consumers feeling “frustrated and disappointed.”
“With the CPC Network Guidelines, every time a player uses an in-game token—which happens millions of times daily and works just like tokens at a theme park—companies would need to treat every such use as a distinct financial transaction requiring extensive legal processes,” he writes. “Meanwhile, a future Digital Fairness Act risks codifying these guidelines into law—ruining the experience for players and families.”
Paananen claims companies like Supercell—which relies heavily on free-to-play monetization practices—have already made protecting consumers a top priority. For instance, he claims the firm already disincentivises long play after 45 minutes within its online battler Brawl Stars.
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“Every decision we make is grounded in our mission to make fun, healthy, safe experiences for players of all ages, he adds. “[…] If we don’t, we know players will take their time elsewhere.”
Notably, Paananen claims the proposed regulations could decide the future of Europe’s entire video game industry, and has called on his peers to speak out and work constructively with EU decision makers to ensure Europe “remains a continent where digital industries thrive.”
“Rather than implementing sweeping regulations that would cripple the industry and fail to protect players, we should strengthen existing frameworks already putting European gamers first,” he continues.
“This would mean that the Digital Fairness Act consultation must include genuine industry engagement. As dialogue with the CPC Network progresses, in-game currencies are currently rightfully recognise as digital content under existing law, and should not be classified as ‘digital representations of value.’ Most importantly, any new regulations must be based on evidence, not hypothetical assumptions—and be proportionate to the harm.”