By Brian Baglow
Yesterday, the European Commission formally adopted its draft proposal for the Digital Fairness Act (DFA), and within hours, the European games sector responded with unprecedented alarm.
In a stark joint statement, the European Games Developer Federation (EGDF) and Video Games Europe (VGE) declared the draft legislation “game over for the European games industry”, condemning the proposal as “unworkable, unjustified and disproportionate”. Germany’s industry body, game, echoed those warnings, arguing that Brussels is hitting developers with legal uncertainty and blanket bans that threaten the continent’s creative independence.
While it is easy to view this clash simply as heavy-handed Brussels bureaucracy colliding with a misunderstood creative tech sector, the reality is slightly more nuanced. Whenever a rapidly evolving digital industry leaves a visible gap between its best practices and its most ‘commercially-focused’ outliers, lawmakers will eventually step in to close it.
What the Digital Fairness Act Proposes
Designed to overhaul EU consumer law for the digital era, the DFA targets manipulative commercial practices, dark patterns, subscription traps, and unfair monetisation across online platforms. However, its application to interactive entertainment cuts straight into the core architecture of modern game design and live-ops business models:
- Virtual Currencies and Microtransactions: The proposal treats every single in-game currency exchange as a formal financial purchase. Paid virtual currencies must be switched off by default for minors, while loot boxes and paid random items face an outright ban for anyone under 18.
- Pay-to-Win and Pay-to-Progress: The draft seeks to prohibit mechanics deemed to confer unfair competitive advantages or bypass artificial difficulty barriers. Because these terms are poorly defined in the legal text, trade bodies warn that almost any standard in-app purchase or progression boost could fall foul of the law.
- The PEGI 18 Trap: In a major structural flaw, the draft treats any title rated below PEGI 18 as being directed at children. Because age ratings indicate suitability rather than target audience, studios face an impossible choice: strip out standard commercial features across the board, or lock under-18s out of age-appropriate games entirely.
- Regulating Design Mechanics: The Act targets “addictive design features”, requiring off-switches or restrictions around persistent prompts and engagement loops, while granting the Commission powers to expand restricted design practices via delegated acts.
- Severe Penalties: Backed by revisions to the Consumer Protection Cooperation Regulation, the Commission proposes direct investigation powers with fines reaching up to 6% of a company’s worldwide annual turnover.
The Outlier Problem
Trade associations are entirely right to point out that the DFA overlooks decades of established co-regulation. Europe’s games sector built PEGI, expanded criteria to flag in-game purchases and random items, and worked with platform holders to embed parental spending and playtime controls across consoles, PC, and mobile.
At the same time, it is worth acknowledging why policy makers feel compelled to intervene.
The frustration for the vast majority of developers is that video games are overwhelmingly built by passionate, creative teams focused on craft, community, and fair entertainment. Yet, across the wider global market, a handful of aggressive live-ops operators have leaned heavily into “black hat” engagement mechanics – manufacturing artificial friction, exploiting psychological triggers, and designing monetisation loops that push spending boundaries.
When those outlier models generate headlines, regulators rarely distinguish between a predatory casino clone and a thoughtfully crafted indie title. Without a clear, industry-wide mechanism to separate ethical design from aggressive extraction, honest studios end up caught in the same regulatory net.
What Scottish and UK Studios Must Watch Closely
Brexit (the gift which never stops giving) offers zero insulation from this legislation. Any Scottish or UK studio distributing digitally into the European Single Market – whether via Steam, the App Store, Google Play, or console store fronts – must comply with EU consumer rules when selling to European players. If there is one group across Europe quietly celebrating yesterday’s announcement, it is the corporate compliance lawyers.
As the draft moves through the European Parliament and Council over the coming months, Scottish developers and studio leads need to keep a sharp eye on several critical developments:
- Mandatory EU Legal Representation: Under the revised enforcement rules, non-EU companies operating in the European market will be required to appoint a formal legal representative inside the EU to liaise with consumer authorities. For small and mid-sized Scottish indies, this introduces an immediate, fixed compliance overhead.
- Fixed Audit Costs on Small Teams: Even studios that avoid aggressive monetisation altogether will face legal reviews, store-page disclosures, and UX audits to ensure their progression loops do not trigger vague “pay-to-progress” or “addictive design” clauses.
- Customer Service Mandates: The Act introduces a consumer right to communicate directly with a human customer service representative upon request, creating operational staffing considerations for micro-studios running live online titles.
- Storefront Gatekeeping: Expect major digital store fronts to enforce sweeping, lowest-common-denominator compliance rules globally rather than maintaining separate EU and non-EU builds – much as we saw with GDPR and Apple’s ATT framework.
- Parliamentary Amendments: The proposal is not yet law. Studios should stay closely connected to trade bodies and policy groups as the European Parliament debates crucial revisions around PEGI age-rating definitions and virtual currency rules.
Leading From the Front: Towards a Player-First Standard
The real risk of the Digital Fairness Act is not just the legal red tape; it is the broader narrative. By grouping video games alongside addictive social media feeds and manipulative e-commerce dark patterns, Brussels risks framing interactive entertainment as an inherent consumer hazard rather than a vital cultural and economic success story.
Lobbying Brussels for clearer, fairer definitions is essential, and trade bodies are right to fight for workable rules. Alongside that effort, our sector has a genuine opportunity to lead from the front.
We need to draw a clear, visible line between predatory extraction and player-first design. Establishing an industry-backed code of conduct – a recognised Player Kitemark that certifies games built around transparent pricing, fair progression, online safety and genuine respect for the audience – would give studios a way to demonstrate best practice proactively (That’s mentioned in the Games Action Plan in terms of industry best practice).
By championing “white hat” design as our defining standard, we can show both players and policymakers that the games industry is a force for good – and ensure regulators can tell the difference between a predatory slot machine and a work of interactive art.