The United Kingdom’s Competition and Markets Authority (CMA) have announced that they are investigating whether the auto-renewal of membership subscriptions for Microsoft’s Xbox Live, Sony’s Playstation Plus, and Nintendo Switch Online are legal.
In order to play games with other people, Microsoft, Nintendo and Sony require users to purchase a membership subscription to one of their online services. These memberships can be purchased in different intervals, ranging from monthly, three months, six months and yearly.
The current prices for yearly memberships on each of the three platforms are:
- $59.99 USD/year for Xbox Live Gold
- $19.99 USD/year for Nintendo Switch Online ($34/year for family plan allowing 5 systems to use the membership)
- $59.99 USD/year for Playstation Plus
At the end of each membership subscription, the default setting is to automatically renew them again for the same duration and same price.
The CMA is investigating whether the auto-renewal practices of these services are fair, are they providing users with enough notification, and are opportunities to change the quality of the membership being offered. They would also like consumers to share their experiences regarding the following issues:
- are the contract terms unfair? – do the companies’ terms give them wide discretion to change the quality of the deal, for example, by reducing the number of games included or increasing the price?
- how easy it is to cancel or obtain a refund? – are there any factors that make it difficult for people to cancel their contract or get their money back?
- how fair is the auto-renewal process? – are customers clearly told that their membership will be rolled over, are they regularly reminded that they are on a roll-over contract before further payments are taken, and is auto-renewal set as the default option?
As the investigation is currently in an early stage, there has been no determination whether these three companies have broken any laws.
Andrea Coscelli, Chief Executive of the CMA, stated that as roll-over contracts are becoming more commonplace, it is important that they work well for consumers.
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,” stated Coscelli.
If the CMA determines that these companies’ practices are misleading and breaking consumer protection laws, they are prepared to take action.