The German Games Industry Association has cautioned that the Digital Fairness Act may lead to issues of "double regulation and legal uncertainty"

The German Games Industry Association, commonly referred to as Game, has expressed concerns about the new Digital Fairness Act (DFA). They argue that this legislation introduces "double regulation and legal uncertainty," which poses serious risks to developers in Europe.

Recently, the European Commission unveiled the draft for the Digital Fairness Act, after an earlier leak. This legislation is designed to prevent activities that exploit or cause harm to consumers in the digital space, impacting sectors like the gaming industry. Areas affected include rules related to in-game purchases, such as virtual currencies, loot boxes, pay-to-win features, and subscription models.

Game highlighted that generalized prohibitions on in-game purchases, particularly features like loot boxes, virtual currencies, and pay-to-win strategies, could endanger the free-to-play market segment. This segment is vital as it depends on voluntary in-game spending, which constitutes a large portion of the industry’s income.

The association also pointed out ambiguous terms, such as 'pay-to-progress', and the imprecision of regulations, which could lead to legal uncertainties. There is also the potential for fines reaching 6% of a company's annual global revenue, which adds to the concern.

Felix Falk, the managing director of Game, stated, "With the DFA, the Commission wants to regulate business models down to the last detail. In doing so, it is putting at risk the competitiveness of European games companies, which are already struggling to hold their own globally."

Furthermore, Falk expressed worries regarding age classification systems. He argued that the draft DFA could undermine established systems like the USK and PEGI, as all games not rated 18 and above would be considered targeted towards children. Additionally, the inconsistent approach between the DFA and the KIDS Act over parental involvement in social media, as opposed to gaming, could dismantle Germany's effective co-regulatory framework, which the Federal Government should now advocate for at the EU level.

The Game association isn’t alone in their opposition to the DFA. The European Games Developer Federation and Video Games Europe have also criticized the act in a joint statement, labeling it "unworkable, unjustified, and disproportionate."

They added that excessive regulation presents a challenge to competitiveness. With 8,700 companies in Europe, mostly smaller studios, they face increased difficulty competing globally due to restrictive policies. This situation may negatively affect the vibrant European gaming sector and its dedicated players.

For more insights on how the Digital Fairness Act could impact the gaming industry, click here.