The UK’s Competition and Markets Authority has announced that is has launched a consumer law investigation in “the auto-renewal practices of Nintendo Switch, PlayStation and Xbox.” The CMA describes itself as follows;
We work to promote competition for the benefit of consumers, both within and outside the UK. Our aim is to make markets work well for consumers, businesses and the economy.
CMA is a non-ministerial department.
The investigation was opened on April 5 and is specifically looking into;
- use of roll-over contracts
- cancellation and refund policies
- any changes made to the membership
The CMA states that it 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.”
Console Auto Renewal Investigation
According to the CMA’s press release, it has contacted Nintendo, PlayStation and Xbox and requested information about their online contracts with subscribers. This is to assist in understanding these subscriptions and the practices of Nintendo, PlayStation and Xbox.
The CMA is seeking input from the public;
If you are a gamer with a current or expired membership for online gaming for any of the products listed here, the CMA would like to hear from you. Please use the email address below to share your experiences.
Chief Executive of the CMA Andrea Roscelli said, “Roll-over contracts are becoming more and more commonplace and it’s essential that they work well for customers. Our investigation will look into whether the biggest online gaming companies are being fair with their customers when they automatically renew their contracts and whether people can easily cancel or get a refund.
“Should we find that the firms aren’t treating people fairly under consumer protection law, we are fully prepared to take action.”
The issues that the CMA will be specifically focusing on are;
- 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 stated that at this stage it has not formed a view on whether Nintendo, PlayStation or Xbox have broken any consumer protection laws.