Regulation of Payment Systems in Online Games under the Act against Unjustifiable Premiums and Misleading Representations

With the rapid development of the online gaming industry, new forms of gacha systems and payment methods are emerging one after another. These new business models pose new challenges to the existing framework of consumer protection regulations, particularly concerning mechanisms that excessively stimulate the gambling spirit of consumers, including minors, which require careful consideration. In this context, a particularly noteworthy regulatory target is the mechanism where collecting multiple paid items allows the acquisition of special items (commonly known as complete gacha).

To address these challenges, the regulatory framework under the Japanese Act against Unjustifiable Premiums and Misleading Representations (hereinafter referred to as “Premiums and Representations Act”) plays a crucial role. The Premiums and Representations Act aims to protect consumer interests by regulating unfair representations and the provision of premiums that hinder appropriate consumer choices. Based on Articles 2, 3, and 5 of the Act, the Consumer Affairs Agency specifies the detailed regulatory content. Although these provisions were primarily intended for transactions in physical stores, it has been clarified that they also apply to online transactions with the advancement of the digital society.

Particularly noteworthy is the prohibition regulation on “card matching” stipulated in Item 5 of the Sweepstakes Restrictions Notice. This regulation prohibits the provision of premiums through methods that require presenting a specific combination of different types of tickets. Originally, this regulation was intended for physical collectible cards, but it now also applies to digital content. The background to this regulatory expansion is the recognition of the potential danger of excessively stimulating consumer gambling spirit in digital content, similar to physical premiums.

Based on this recognition, the Consumer Affairs Agency explicitly positioned complete gacha in online games as a regulatory target with the revision of operational standards in June 2012 (Heisei 24). This regulation targets mechanisms in internet games that provide items using paid and chance-based methods, offering additional items by collecting specific multiple items. As a result of this regulation, mechanisms that allow the acquisition of special personalitys or items by collecting multiple rare items in-game are comprehensively prohibited, regardless of their economic value.

To ensure the effectiveness of such regulations, specific measures are being advanced within the gaming industry. The Japan Online Game Association, a general incorporated association, has established the “Guidelines for Display and Operation in Random Item Provision Methods” for gacha systems other than complete gacha, conducting self-regulation. These guidelines set specific operational standards, such as methods for displaying the types and probabilities of items obtained from gacha and measures to prevent excessive use by minors. This industry standard functions as a substantial guideline for the information provision obligations of businesses and plays an important role from the perspective of consumer protection.

This regulatory framework is evaluated not only as a mere legal regulation but also as an important measure contributing to the healthy development of the entire online gaming industry. Particularly from the perspective of preventing excessive spending by minors and maintaining the entertainment value of games while ensuring appropriate consumer protection, its significance is considerable.

While considering the balance between consumer protection and the healthy development of the industry, continuous consideration is being given to addressing new challenges. Mechanisms that fall under “card matching” are completely prohibited regardless of the value of the premiums, and this regulation is strictly enforced as a measure to prevent consumers from becoming excessively engrossed in item collection. Game operators are required to conduct legal checks in advance to ensure that new gacha systems do not violate this regulation when designing them.

In conclusion, the introduction of complete gacha constitutes a violation of the Premiums and Representations Act, necessitating careful attention during system design. Additionally, appropriate operation in accordance with industry guidelines is required for other gacha systems. It is expected that efforts to balance consumer protection with the development of a healthy gaming culture will continue in the future.

[Reference] Operational Standards for “Restrictions on the Provision of Premiums by Sweepstakes” (Consumer Affairs Agency Director-General Notification No. 1, June 28, 2012)

4. Regarding Item 5 of the Notice (Card Matching)

(1) The following cases fall under the card matching method of Item 5 of the Notice. When items that can be used in games provided on the internet through mobile or computer terminals are offered for a fee, and the type of items provided is determined by chance, if users who collect two or more different types of items are provided with items that can be used in the game, such as personalitys that fight enemies in the game or items to decorate rooms where avatars live in virtual space.

(2) The following cases do not fall under the card matching method of Item 5 of the Notice. 

a. When a specific combination of different types of tickets is required, but the combination can be completed by the choice of the transaction partner when purchasing the product (although it does not fall under card matching, it may be subject to regulations of other notices such as “Restrictions on the Provision of Premiums to General Consumers”).

b. When tickets with different points, such as one-point tickets, two-point tickets, and five-point tickets, are given, and premiums are provided when the total reaches a certain number of points (although it does not fall under card matching, if it is not clear how many points are in the tickets at the time of purchase, it falls under the method of sweepstakes (refer to Item 1(4) of these operational standards). If it is clear, it may be subject to regulations of other notices such as “Restrictions on the Provision of Premiums to General Consumers”).

c. When there are two or more types of tickets, but premiums are provided by presenting a certain number of the same type of tickets, not a combination of different types (although it does not fall under card matching, if it is not clear which type of ticket is included at the time of purchase, it falls under the method of sweepstakes (refer to Item 1(3) of these operational standards). If it is clear, it may be subject to regulations of other notices such as “Restrictions on the Provision of Premiums to General Consumers”).