EU Draft Law Targets Online Games with New Restrictions on Lootboxes and Login Bonuses

Key points

• The draft EU KIDS Act proposes that online game providers must ensure excessive use by minors is not encouraged, potentially prohibiting login bonuses or loss of benefits for inactivity.
• The legislation requires parental controls and age assurance solutions for online games, though requirements are less strict than those for social networks.
• The draft includes provisions for transparency regarding the real monetary value of virtual currencies and variable reward systems, such as lootboxes, though this is currently only in the recitals and not the operative text for games.
• The act is designed as a binding regulation that would apply directly across all EU member states, superseding national laws, and requires approval from the European Parliament and member states.
• The broad definition of online games could cover everything from Roblox to multiplayer modes of disc-based games, raising questions for persistent worlds and existing age rating systems like PEGI.

Background

This development follows a global trend of tightening youth online safety regulations, including recent California laws mandating age checks for AI chatbots and limiting personalized feeds for minors. The EU's approach builds on previous findings from its special panel on child safety and aligns with international efforts, such as Australia's ban on social media for under-16s, which has faced enforcement challenges. The EU KIDS Act represents a more comprehensive, binding framework compared to national measures in France and Spain, which have faced legal hurdles or are still in planning stages.

How outlets are covering it

GamesIndustry.biz, citing legal expert Dr. Andreas Lober, highlights the ambiguity in the draft regarding monetization transparency for games, noting that lootbox and virtual currency rules appear only in the recitals rather than the operative text, creating uncertainty for developers. BBC emphasizes the broader scope of the act, including restrictions on AI chatbots and video-sharing platforms, and notes potential opposition from member states like France, where courts have previously blocked similar bans on grounds of freedom of expression. Positive News focuses on the social media ban aspect, welcoming the move as a step against tech exploitation of children, but does not detail the specific gaming restrictions. The outlets differ in emphasis: GamesIndustry.biz focuses on the legal and industry implications for game mechanics, while BBC and Positive News focus on the social media and child safety aspects, with less detail on the gaming-specific provisions.

Why it matters

The EU KIDS Act could fundamentally reshape the design and monetization of online games in Europe, forcing developers to remove or modify features like login bonuses and lootboxes to comply with new child safety standards. The binding nature of the regulation means it will apply uniformly across all EU member states, potentially overriding national laws and creating a unified regulatory framework. This could impact global game design if companies choose to apply EU standards worldwide to avoid compliance complexity. The act also signals a shift towards stricter enforcement of child safety in digital spaces, with potential fines for non-compliance, and may influence similar legislation in other regions.

What to watch

The draft EU KIDS Act must now be approved by the European Parliament and EU member states before it becomes law. The legislative process is expected to face opposition and debate, particularly regarding the scope of restrictions on games and the enforcement mechanisms. Member states may attempt to strengthen or weaken the proposals, as seen in France, and the Commission has warned that national laws conflicting with the act may need to be repealed. The final text could clarify the ambiguous provisions regarding monetization transparency for games, and the outcome will likely influence similar regulations in other jurisdictions.