The German consumer association North Rhine-Westphalia (Verbraucherzentrale NRW) announced that it considers numerous terms of service of a leading console marketplace to be in breach with the German law on standard business terms. For this reason, the Verbraucherzentrale NRW sent a cease and desist letter to Sony Europe to stop using the allegedly violating clauses.

As an example, the Verbraucherzentrale NRW names clauses which require the user to use his/her pre-paid credit within 24 months to avoid expiration. The Verbraucherzentrale NRW adds: “A clause which is – by the way – also used by other players of the industry.” The latter sentence is nothing less than a clear hint to such “other players” to stop using the same or similar clauses to avoid becoming subject of cease and desist letters as well.

As another example, the Verbraucherzentrale NRW criticized a clause according to which parents must generally bear all costs that are caused by purchases of their underage children. Lastly, the Verbraucherzentrale NRW names the language used to describe the statutory right to withdrawal for digital sales as an example for an alleged violation. According to the Verbraucherzentrale NRW such language would lack the information that the user must explicitly consent to losing the right to withdrawal upon the start of his/her download.

The Verbraucherzentrale NRW also announced that it will apply for a court order if the cease and desist letter is not followed. This is common practice. German consumer associations typically have deep pockets and pursue alleged violations until the highest possible court level. Thus, companies must either stop using the criticized clauses or be ready to defend them in court. It is therefore recommended that video gaming companies review their T&Cs at least in relation to the above-mentioned examples and assess whether their clauses are defensible or should be amended/removed.

Author

Sebastian Schwiddessen is a senior associate and a member of Baker McKenzie's TMT Practice in Munich. Sebastian has been working in the entertainment and video games industry for over 18 years, from both an operational and legal perspective. Sebastian’s clients range from platform providers over market leading video gaming, film and entertainment companies to indie publishers. Sebastian is well-known as an advisor in the video games and entertainment sector. He also regularly advises a wide range of leading social media companies and video-sharing-platforms on regulatory and copyright related matters.

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