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

Loot boxes are gambling-like products inside video games that players can buy with real-world money to obtain random rewards. Concerns have been raised about potential financial and social harms resulting from overspending. These mechanics are generally not regulable under gambling law and are thus widely available, including to young children, 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, the Authority for Consumers and Markets [Autoriteit Consument and Markt], was the first to publish dedicated industry guidelines on how video game companies should comply with consumer law when offering in-game purchases generally and loot boxes specifically. Games are required to (i) display a euro price for in-game purchases and loot box offers specifically; (ii) disclose loot box probabilities, including specifically for each individual item that could potentially be obtained; (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 make purchases. Except for one rule (disclosing the presence of generic in-game purchases), compliance was very poor (around 10.0% and even lower or almost non-existent with certain requirements). Besides smaller foreign companies possibly lacking awareness, more reprehensibly, leading companies who almost certainly had knowledge of the rules also did not 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.