Posted on April 5, 2019 by staff

Console giants facing online contract probe


The Competition and Markets Authority has launched a consumer law investigation into Nintendo Switch, PlayStation and Xbox to find out whether their auto-renewal terms are unfair.

The CMA 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.

As well as buying consoles and games, people can pay for online services, such as playing against other gamers, communicating with other players, and extra games.

These services can involve a membership which is often entered into on an auto-renewal basis. This means that money will be automatically taken from a person’s account as the membership rolls over.

The CMA has written to Nintendo Switch, PlayStation and Xbox requesting information about their online gaming contracts to help better understand their practices.

It is also calling on customers who use these services to get in touch with the CMA and share their experiences as it seeks to find out whether the contract terms are unfair – for example giving the firms’ discretion to reduce the number of games included or increase the price – whether it is easy enough to cancel or obtain a refund, and whether the auto-renewal process is fair.

“Roll-over contracts are becoming more and more commonplace and it is essential that they work well for customers,” said CMA chief executive Andrea Coscelli.

“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.”