Competition regulator the Competitions and Markets Authority has launched an investigation into the business practices of major online gaming platforms such as, Playstation, Nintendo Switch and Xbox.
The regulator says it has concerns over the business practices of major gaming platforms.
It says it is concerned about the legality of auto-renewals for online gaming contracts, certain cancellation and refund policies, and terms and conditions.
Modern gaming consoles don’t just cost an initial outlay. The major consoles such as Playstation, Nintendo Switch and Xbox come with online gaming services that cost players a subscription fee to use.
These contracts entered into by players are often and managed on an auto-renewal basis, so instead of it ending after a fixed time frame, the customer will be subject to new fees when the contract rolls over.
The watchdog says it has written to Nintendo Switch, Playstation and Xbox to ask for information about their online gaming contracts, to better understand the practices.
It also wants customers who use such services to get in touch and share their views.
It plans to investigate the fairness of contract terms, easiness of obtaining a refund or cancel a contract, and the fairness of the auto-renewal process.
Andrea Coscelli, chief executive of the CMA, says: “Roll-over contracts are becoming more and more commonplace and its 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.”
The investigation forms part of the CMA’s wider look at the loyalty penalty as raised in a super complaint issued by Citizens Advice in September 2018.
A spokesperson for Microsoft (maker of the Xbox) says: “We have received a notification from the Competition and Markets Authority and will be co-operating fully with their investigation.”
Moneywise has also contacted Nintendo and Playstation for comment and will update this piece if we receive a reply.