The Competition and Markets Authority (CMA) have launched an investigation into the way subscriptions to online game services on the Nintendo Switch, Sony PlayStation and Xbox platforms are renewed, amid fears they are unfair.
The competition watchdog has announced that its consumer law investigation will seek to determine if the companies’ business practices are legal.
The investigation will focus on the use of auto-renewals for online gaming contracts, the companies’ cancellation and refund policies and their terms and conditions.
The services allow gamers to pay for online services including playing against rivals, communicating with other players and extra games. This often involves a membership that is entered into on an auto-renewal basis, in which money is automatically taken from a person’s account.
The CMA has written to the three companies behind the consoles – Nintendo, Sony and Microsoft requesting more information about their online gaming consoles in a bid to understand their practices.
The Authority also plans to call on customers who use their services to get in touch and share their experiences 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 has not reached a view as to whether or not the companies have broken consumer protection law. If it decides they have, it could take legal action against the technology giants.
Andrea Coscelli, the CMA’s chief executive, said: “Rollover 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.”
Justin Ellis, head of the technology practice at iLaw said: “While auto-renewal clauses are common in business to business contracts, consumers have greater protection. So if these clauses, in conjunction with other provisions that work in favour of the suppliers, are found to be unfair to consumers, they could be forced to change their practices.”
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