The Competition and Markets Authority (CMA) has today 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.
At this early stage, the CMA has not reached a view as to whether or not companies have broken consumer protection law. However, if the CMA thinks the companies’ practices are misleading or their terms are unfair, such that they are breaking consumer protection law, 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.”