Excerpt
CMA held Microsoft liable for unclear upfront terms, difficulty in turning off auto-renewal, and customers unknowingly paying for unused services in their auto-renewing Xbox Live Gold and Game Pass memberships.
Our analysis
Microsoft's Xbox Live Gold and Game Pass provide a platform for gamers to access a vast library of games and play with each other online. These products operate on a membership basis, with automatic renewal at the end of each contract period, requiring customers to actively take steps to cancel their subscription. The Competition and Markets Authority (CMA) has launched an investigation into the auto-renewal terms of Nintendo Switch, PlayStation, and Xbox to determine if they are unfair. During its investigation, the CMA identified concerns regarding Microsoft's auto-renewing subscriptions, including unclear upfront contract renewal terms, difficulty in turning off automatic renewal, and customers continuing to pay for services they no longer use. Microsoft has made commitments to address these concerns in the CMA's efforts to investigate the online console video gaming sector.
Outcome
Microsoft has made significant improvements to its Xbox memberships following an investigation by the Competition and Markets Authority (CMA). The changes include better upfront information about auto-renewal terms, refunds for accidental renewals, reminders for inactive memberships, and clearer notifications of any future price increases.
Parties
Competition and Market Authority (CMA) and Nintendo Switch, PlayStation and Xbox
Case number
Press Release of 5 April, 2019
Decision
Related deceptive patterns
The hidden subscription deceptive pattern typically works by employing some form of sneaking or misdirection. Users think they are buying one thing, when in fact there's a hidden legal stipulation that they are in fact signing up to a recurring subscription. Once they have signed up, the service is usually covert and the user is sent no emails or notifications reminding them that they are paying on a recurring basis, so that payments continue for as long as possible. It is also typically paired up with the hard to cancel deceptive pattern.
Hard to cancel (aka "Roach Motel") is a deceptive pattern where it is easy to sign up for a service or subscription, but very difficult to cancel it. This typically involves hiding the cancellation option, requiring users to call customer services to cancel, and making the cancellation process overly complex and time-consuming. This can cause users to give up trying to cancel, and continue paying for the service for a longer period.
Related laws
Prohibit traders across all sectors from using unfair commercial practices that hinder consumers from making informed purchasing decisions.
Covers various aspects of consumer transactions, including the sale of goods and services, digital content, unfair contract terms, and remedies for faulty goods.
Grant consumers the right to cancel contracts for goods or services made through remote communication channels such as the internet, email, or telephone.