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Questions & answers – Sweep on on-line games, books, videos and music

European Commission - MEMO/12/945   06/12/2012

Other available languages: none

European Commission

Memo

Brussels, 6 December 2012

Questions & answers – Sweep on on-line games, books, videos and music

Why were digital content websites selected for this Sweep?

The use and sale of on-line games, books, videos and music which can be downloaded ("digital content") have become popular among European consumers. A 2011 study indicated that 79% of total respondents across a sample of EU countries have used on-line music services within the previous 12 months and 60% on-line games1. The number of users is expected to rise further in the future. The same study indicated significant percentages of service users experiencing at least one problem; 21% for music and 27% for games. In 2011, the European Consumer Centres reported around 30 complaints in this area. These factors highlighted the urgency for this specific examination of digital content websites.

What are the results of the investigation?

Of the 333 websites checked, only 24% (79) passed the first test for compliance with the relevant EU consumer rules and 76% of sites (254) were flagged for further investigation.

Member States were free to choose the number of sites to check, e.g. on basis of the resources they could spare for the Sweep. As a result, some Member States checked more sites than others. Most websites were chosen for the popularity of their products and via keywords.

Why does the Sweep take place simultaneously across the EU?

Deceptive online selling practices often concern operators located in several Member States. Ill-intentioned operators can be detected and tackled more effectively thanks to EU wide co-operation. Under the Consumer Protection Cooperation (CPC) Regulation, European authorities co-operate to suppress illegal practices which spread over several Member States. Compliance checks carried out simultaneously in a specific sector across the EU enhance the overall effectiveness of controls and demonstrate the EU willingness to tackle seriously such problems. Cooperation reduces fragmentation in the European internal market, for the benefit of both consumers and reputable businesses.

What did national authorities check?

In this Sweep, national authorities checked whether traders provided essential information on the main characteristics and price of digital content which can be downloaded, as well as contact details of the trader. They also looked at the contract terms.

Why was a complementary study carried out?

The Commission contracted a study which looked at two additional issues: information to consumers about whether they can use downloaded digital content in another country and about games targeting children which are advertised for free, but may involve payment at a later stage ("in-game purchases").

What kinds of problems do consumers face on this market?

The biggest problems are the existence of unfair terms by which traders try to limit their liability as much as possible and thereby limiting consumers' legitimate right not to receive products which damage their equipment or to get reimbursed in case these products do not function. Another issue is that consumers do not get the information which they are supposed to receive, such as on the price, the main characteristics of the product, the exercise of the right of withdrawal and the identity of the trader. In addition, consumers are not informed that they cannot use the digital content in another Member State and that games advertised for "free" are involving payments at a later stage. See table 2 in the Annex for details.

Which sensitive issues came up?

The Sweep and particularly the study looked at the issue of the vulnerable consumers, particularly children, in relation to on-line games. The Sweep found that websites targeting young children often use contract terms which are difficult to understand. The study detected that websites lure children into purchases after having advertised games for free. While the game progresses, they need to pay in order to continue the game or to buy advanced features (e.g. better cloths for their avatar, better decoration for their house or better food for their virtual pet).

What EU rules is the Sweep based upon?

The following EU consumer rules and their translation into national laws are relevant here:

  1. Directive 2005/29/EC – Unfair Commercial Practices: Under this Directive, traders must display in a clear and intelligible way all the key information that consumers need in order to make an informed choice, such as any restrictions on content/features that inhibit access to the full functionality of the digital content or the fact that no right of withdrawal exists for downloaded digital content.

  2. Directive 2000/31/EC – Electronic commerce: Under this Directive, traders are obliged to provide their identity, geographical and e-email address on their website.

  3. Directive 97/7/EC – Distance Selling Directive: It applies to any consumer distance contract made under the law of a Member State and requires for example that the trader provides to a consumer essential information prior to the conclusion of the contract, e.g. on the price of the product, the main characteristics of the goods or services and the right of withdrawal.

  4. Directive 93/13/EEC – Unfair Contract Terms: It requires that the terms and conditions of the sale contract are fair (i.e. do not create a significant imbalance between the parties to the detriment of the consumer) and clearly drafted.

Did the results demonstrate a cross-border dimension?

1 out of 4 websites flagged for further investigation (69) were directing their offer cross-border. This shows that digital content is often offered from a company located in one Member State to consumers in other Member States.

How long does it take to ensure compliance of websites with EU rules?

Some companies are immediately willing to correct errors when enforcers contact them, while others use all available tools (including legal ones) to postpone mandatory changes. The length of the enforcement phase depends on how complicated the individual cases are or whether they require international coordination, in which case it may take more than a year.

For more information please see: IP/12/1320

Table 1. Number of websites checked during the sweep and flagged for further investigation

Country

Websites checked2

Websites flagged for further investigation

Of which with a cross-border dimension

Austria

10

8

5

Belgium

11

11

11

Bulgaria

10

0

0

Cyprus

3

3

0

Czech Republic

11

3

1

Denmark

10

8

3

Estonia

10

5

1

Finland

10

8

0

France

27

26

3

Germany

26

13

5

Greece

10

9

0

Hungary

6

5

0

Iceland

10

9

0

Italy

10

7

0

Latvia

10

10

1

Lithuania

10

10

0

Luxembourg

8

5

5

Malta

10

8

8

Netherlands

11

11

6

Norway

10

9

3

Poland

10

4

4

Portugal

20

14

2

Romania

10

10

0

Slovakia

10

9

4

Slovenia

4

4

0

Spain

28

24

6

Sweden

17

15

0

United Kingdom

11

6

1

Total 28 countries

333

254

69

Table 2. Most common problems found in the Sweep

Type of problem

Examples of problem

Total number of websites in which these problems were detected

% of problematic websites

Unfair terms

a. The trader excludes his liability when the data transfer is incomplete or when the product is not compatible with the consumer's hardware or software.

b. The trader excludes or hinders the consumer's right to take legal action or seek any other legal remedy, e.g. by stating that the competent court is in the trader's country or by stating that there is no legal action possible.

c. The trader excludes to reimburse the consumer in case the product fails to work or is of unsatisfactory quality (although the consumer has a right to it).

a. 103

b. 76

c.51

Total: 230/333

a. 56%

b.33%

c. 22%

Total: 69%

Right of withdrawal

Consumers are not told that they do not have a right to withdraw from the contract, once the product is downloaded, as download is equal to consumption.

141/333

42%

Missing information

Identity, geographical address and e-mail address of the trader is not mentioned.

121/333

36%

The above figures are not exhaustive or statistically representative as some Member States looked at sites they knew to be problematic. Many sites had more than one suspected infringement.

Table 3. Problems found in the study

Type of problem

Examples of problem

Total number of websites in which these problems were detected

% of problematic websites

In-game purchases

Consumers are lured into playing games thinking that it is for free, but in reality they have to make a payment when the game progresses. When consumers are informed about payments, this is difficult to find as it is given in the general contract terms and the exact amount is not indicated.

88/101

87%

Missing information

Consumers are not informed whether they can use or not the downloaded digital content in another country.

726/1001

73%

What consumers need to check before and after buying digital content products online

  1. Make sure that the trader provides his name, geographical and e-mail address.

  2. Check that you are given sufficient information and minimum operating system requirements of the product such as size, quality and whether a device or particular software is needed in order to operate the digital content product.

  3. Look out for the final price; including taxes and all charges that may be hidden in the last stages of the payment process.

  4. Be aware that once you have started downloading the product, you have usually no right to return it.

  5. Beware of terms that exclude the trader from various liability and redress mechanisms; they are probably unfair.

  6. You have a right to take legal action and seek any legal remedy. Any restriction of that right is considered unfair.

  7. Look for information whether you can use or not the digital content in another country than the one you reside in. Contact the sales office for advice, if you do not find the information.

  8. Be careful when you or your child see games advertised as free; there might be add-ons requiring payment without you being warned about it beforehand.

  9. In case of a problem with a trader in another Member State you can report it to your local European Consumer Centre.

1 :

See 'Digital Content Services for Consumers: Assessment of Problems Experienced by Consumers Final Report', p. 16 available at

http://ec.europa.eu/justice/consumer-marketing/files/empirical_report_final_-_2011-06-15.pdf

2 :

Each country was asked to check at least 10 websites; in some this was not possible due to a smaller market.


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