Epic Loses Case, Targets Blizzard Next

Key Takeaways

• A Rotterdam court upheld a EUR 1.125 million fine against Epic Games in January 2026 for using FOMO tactics and misleading countdown timers targeting children in Fortnite.
• Italy's competition regulator (AGCM) opened investigations into Activision Blizzard's Diablo Immortal and Call of Duty Mobile for dark patterns, aggressive monetization, and inadequate parental controls.
• The EU's proposed Digital Fairness Act (DFA), expected as a legislative proposal in Q4 2026, would standardize rules on loot boxes, virtual currencies, dark patterns, and addictive design across all member states.
• The US FTC finalized a $245 million refund order against Epic Games for deceptive billing, with nearly $200 million already disbursed to players as of mid-2025.
• Cognosphere (HoYoverse), maker of Genshin Impact, settled FTC charges in January 2025 for $20 million and is now banned from selling loot boxes to players under 16 without parental consent.
• Companies face a strategic choice: build EU-compliant versions of their platforms or apply changes globally — with compliance costs likely lower than the cost of exclusion from the EU market.

Here is a closer look at each of these developments.

Regulatory Clampdown on Gaming Giants

Blizzard is currently under investigation while Epic Games has already faced consequences. European regulators are holding major gaming companies accountable for dark patterns and exploitative consumer practices — and the pressure is spreading globally.

In recent years there have been developments in how digital currencies are handled under existing EU law, despite initial controversy over the lack of industry consultation. Recent enforcement actions show that existing legislation can tackle unfair practices without waiting for new rules — specifically, regulators are targeting companies like Blizzard and Epic under laws already on the books.

Blizzard's Legal Challenges

Activision Blizzard is under scrutiny by Italy's competition regulator (AGCM) for dark patterns in Diablo Immortal and Call of Duty Mobile. The primary allegations focus on:

• Misleading and aggressive marketing practices around in-game purchases
• Failing to uphold consumer contractual rights
• Targeting children through insufficient default parental controls

Both games allow minors to make purchases, play for extended periods, and communicate with other users without default restrictions. Should the games be found in violation of Italian consumer law, regulators may impose fines or require changes to business practices.

Epic Games' Dutch Setback

Epic Games lost an appeal against a EUR 1.125 million fine levied by the Dutch Consumer Authority (ACM). The Rotterdam District Court upheld the fine in January 2026, ruling that Epic had used fear-of-missing-out (FOMO) tactics and misleading countdown timers to pressure children into purchasing Fortnite items. Although the monetary penalty is minor for a company of Epic's scale, the ruling matters because it forces compliance with regulatory directives. Epic has since removed countdown timers from the Item Shop worldwide — a concrete operational change driven by a single national ruling.

The EU's Digital Fairness Act

The upcoming Digital Fairness Act (DFA) is a wide-ranging regulatory effort aimed at curbing online consumer exploitation across platforms, including gaming. A legislative proposal is expected from the European Commission in Q4 2026, following a public consultation in 2025 that generated over 3,300 responses. Key areas under examination include:

1. Transparency requirements for virtual currency rates and bans on pressure-based sales tactics
2. Restrictions on bundling and opaque pricing strategies
3. Improved refund processes and default parental control settings
4. Rules around skin gambling, loot boxes, and consumer rights when games are shut down early

If these proposals come into force, players can expect clearer pricing information, stronger consumer rights, and more meaningful control over digital purchases.

Implications of New Regulations

The evolving regulatory landscape has raised real questions about the ownership and value of virtual assets. If virtual currency like RuneScape gold were stolen, courts in some jurisdictions treat it as property theft. A harder question is what happens to virtual currencies when a game shuts down — a gap the DFA aims to address. While the UK is no longer in the EU, these debates have broader implications for players everywhere.

Subscription Models and Consumer Rights

Changes are also being considered for subscription models, with a focus on making cancellations simpler and communications about auto-renewals or price changes clearer. Services like World of Warcraft subscriptions or PlayStation Plus could be affected, with regulations pushing for better disclosure and easier opt-out mechanisms for consumers.

Timeline for Implementation

The path from proposal to enforcement is long. Consultation summaries and impact assessments are due ahead of the Q4 2026 legislative proposal. The EU Parliament and Council will then negotiate before adopting the final text, after which companies will have an adjustment period — and may pursue legal challenges. Realistically, enforcement is unlikely to begin before 2028 at the earliest.

Global Effects and Industry Responses

These regulations carry global weight because companies must decide whether to build EU-specific versions of their platforms or apply changes worldwide. That decision comes down to cost: if the expense of compliance is lower than the revenue risk of losing access to the EU market, most companies will choose a global overhaul.

Past loot box bans in individual countries show how this plays out. Companies tolerated exclusion from smaller markets like Belgium and the Netherlands, but a full EU-wide rule is a different calculation. Pressure from US regulators reinforces the trend:

• The FTC finalized a $245 million refund order against Epic Games for deceptive billing practices; nearly $200 million had been disbursed to players by mid-2025.
• Cognosphere (HoYoverse), maker of Genshin Impact, settled FTC charges in January 2025 for $20 million and must now obtain parental consent before selling loot boxes to players under 16.

These cases show that regulators on both sides of the Atlantic are prepared to act.

The Cost of Regulation

Regulation carries trade-offs. Smaller developers face higher compliance costs and legal complexity that larger studios can absorb more easily. There is genuine potential for self-regulation and industry collaboration with regulators to manage these pressures.

The transition away from dark patterns may reduce short-term profits and growth. But it raises a question the industry cannot avoid: if a business model depends on manipulation, how durable is it? The companies that adapt proactively are better placed than those that wait for enforcement to force the issue.

This regulatory shift marks a turning point for how digital consumer rights intersect with gaming — and the outcome will shape the industry for years to come.

Frequently Asked Questions

Did Epic Games lose the Dutch court case over Fortnite?

Yes. In January 2026, the Rotterdam District Court upheld the Dutch Consumer Authority's EUR 1.125 million fine against Epic Games for using misleading countdown timers and FOMO tactics targeting children in Fortnite.

What did the Dutch Consumer Authority fine Epic Games for?

The ACM fined Epic for three practices: deceptive countdown timers that overstated item scarcity, presenting complex offers under time pressure, and directly urging children to buy items or persuade adults to buy for them.

What changes did Epic make after the Dutch ruling?

Epic removed all countdown timers from the Fortnite Item Shop worldwide. The shop now displays the local refresh time and the exact date each item will leave the shop.

What is the EU Digital Fairness Act and how does it affect games?

The Digital Fairness Act is a proposed EU regulation expected as a legislative proposal in Q4 2026. It would ban dark patterns, require transparent virtual currency pricing, restrict loot box sales to minors, and address addictive design mechanics across digital platforms including video games.

Why is Italy investigating Activision Blizzard?

Italy's AGCM opened investigations into Diablo Immortal and Call of Duty Mobile for aggressive in-game monetization, misleading interface design, inadequate default parental controls, and potentially deceptive data consent flows — all affecting minors.

How much did Epic Games pay the FTC in the United States?

Epic agreed to a $245 million refund order with the FTC for deceptive billing practices. As of mid-2025, the FTC had disbursed nearly $200 million to affected players.

What happened to Genshin Impact and loot boxes?

In January 2025, Cognosphere (HoYoverse) settled FTC charges for $20 million. The settlement bars the company from selling loot boxes to players under 16 without parental consent and requires transparent disclosure of loot box odds and costs.

Will gaming loot boxes be banned in the EU?

A full ban is not certain, but the Digital Fairness Act is expected to impose strict disclosure rules, restrict sales to minors, and potentially require that loot boxes be purchasable directly with real money rather than through obfuscated virtual currency systems.