The CMA last week provided an update into its investigation on the auto-renewal practices of major video game console companies. The investigation, initially launched in April 2019, was tasked with investigating the supply of online gaming memberships for Nintendo Switch, PlayStation and Xbox that give access to members for exclusive multiplayer features, rewards and discounts.
Online memberships have come to the attention of the CMA from a consumer law perspective, as some of these companies adopt auto-renewing practices that the CMA considers may be unfair. In particular, there are concerns that the auto-renewal process may be obscured to customers because of a lack of notification and reminders, and because players may be opted into auto-renewal of their subscriptions by default. The CMA is also concerned with the fairness of the contract terms, cancellation and refund policies used with online memberships.
On 26 January 2022, the CMA announced that it had secured undertakings from Microsoft to make a series of improvements to their auto-renewing subscriptions for Game Pass and Xbox Live Gold. Microsoft has now agreed to:
- improve the upfront information it provides to help customers understand their online membership – e.g. renewal status, price, date and information on refunds;
- contact existing customers on recurring 12-month contracts and give them the option to end their contract and claim a pro-rata refund;
- contact inactive paying members to remind them how to stop payments, and if they continue not to use their memberships, Microsoft will ultimately stop taking further payments; and
- provide clearer notifications on any future price rises and will ensure people know how to turn off auto-renewal if they don’t want to pay the higher price.
This is the first update from the CMA on its investigation and we expect further announcements regarding Nintendo Online and PlayStation Plus to follow. As well as console manufacturers, game publishers that operate a subscription model will no doubt be watching closely as well.