The new EU law focuses on loot boxes

The European Union Commission published its proposal for the Digital Justice Act (DFA) on Wednesday. The draft targets many practices on gaming, social media and e-commerce platforms, from misleading prices to loot boxes. However, the text is still at the draft stage and may change or some articles may be removed completely while it is being passed by the European Parliament and the Council.

The commission says the law will protect users of all ages. Because thanks to fair competition, EU consumers are expected to save up to 13.7 billion euros ($15.1 billion) annually.

What's in the Digital Justice Act?

The proposal limits apps that push consumers to spend more time and money. The main items are as follows:

Manipulative marketing and "dark pattern" methods, such as false claims that the product is nearly sold out, will be banned.

Users will be able to turn off constant notifications, infinite scrolling, and autoplay of videos. These restrictions also include artificial intelligence companions and general chatbots.

Gambling-like features aimed at minors, such as pay-to-win and pay-to-progress, will be banned.

Influencers will clearly state advertising content and cannot exploit children's trust.

Personalized advertising and pricing that targets minors or uses sensitive data will be limited.

Subscription, price and customer service

Subscriptions and digital contracts can be canceled easily. Moreover, the user will be reminded before automatic renewal and free trial end.

Price transparency also becomes mandatory. Dynamic pricing and net price will be displayed for purchases using in-game virtual currency. Those waiting in virtual queues for cultural and sports event tickets will be shown the current price in real time and with the highest possible amount.

Consumers will also have the right to communicate with a human customer representative. Clear rights are also defined in purchases made with the artificial intelligence agent.

Reaction came from the industry

The scope is wide. For example, it can range from recommendation algorithms on YouTube, TikTok and Meta platforms to artificial intelligence chatbots and services such as Duolingo that constantly call the user to the application. For this reason, some gaming organizations have described restrictions on offering virtual currency, loot boxes and microtransactions to minors as "unenforceable, unfair and disproportionate".

EU Commissioner Michael McGrath said, "We are not making it harder to do business, we are making it harder to do business unfairly." McGrath also said that the 21st century consumer cannot be protected by rules that cannot keep up with the economy of that century.

If the law comes into force, companies that violate the rules could face fines of up to 6 percent of their global annual turnover. The proposal will now undergo approval by the European Parliament and the EU Council.