Competition watchdog to probe games companies over contracts


The competition watchdog has launched an investigation into Nintendo Switch, PlayStation and Xbox amid fears that their auto-renewal terms are unfairly hammering gamers.

The Competition and Markets Authority (CMA) said on Friday that its consumer law investigation will seek to determine if the consoles’ business practices are legal.

It will focus on the use of auto-renewals for online gaming contracts, cancellation and refund policies and their terms and conditions.

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

This can involve a membership which is often entered into on an auto-renewal basis, where money will be automatically taken from a person’s account.

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 in order to assist the investigation.

The probe will seek to determine if the contract terms are unfair, whether it is too difficult to cancel or obtain a refund and if the auto-renewal process is transparent.

The antitrust body insisted that at this stage it has not reached a view as to whether or not the companies have broken consumer protection law.

However, if the CMA decides that they have, it could take enforcement action.

Andrea Coscelli, chief executive of the CMA, 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.”

Chris Price
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