Federal Loot Box Legislation Introduced: The Protecting Children from Abusive Games Act

Language for the “The Protecting Children from Abusive Games Act” was introduced on May 23, 2019 by Senator Josh Hawley (R-Mo.), along with Senators Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn.). This bill purports to ban the exploitation of children through “pay-to-win” and “loot box” monetization practices by the video game industry. The rules would make it unlawful for game publishers and distributors to offer minor-oriented games with pay-to-win microtransactions or loot boxes. The prohibition would also apply to games with a broader audience, but which publishers and distributors have constructive knowledge that such games are played by minors.

“Minor-oriented game” is defined as:

an interactive digital entertainment product for which the target audience is individuals under the age of 18, as may be demonstrated by—

(A) the subject matter of the product;

(B) the visual content of the product;

(C) the music or audio content of the product;

(D) the use of animated characters or activities that appeal to individuals under the age of 18;

(E) the age of the characters or models in  the product;

(F) the presence in the product of—

(i) celebrities who are under the age of 18; or

(ii) celebrities who appeal to individuals under the age of 18;

(G) the language used in the product;

(H) the content of materials used to advertise the product and the platforms on which  such materials appear;

(I) the content of any advertising materials that appear in the product

(J) other reliable empirical evidence relating to—

(i) the composition of the audience of the product; or

(ii) the audience of the product, as intended by the publisher or distributor of  the product; or

(K) other evidence demonstrating that the product is targeted at individuals under the age of 18.

The definition of “pay-to-win microtransactions” means an add-on transaction to a digital game which offers a scoring system and provides the user with assists, allows the user to progress faster within the game, aids users in obtaining awards that are otherwise available in the game without purchase, permits access to content that has since expired, or provides a competitive advantage over other users. Within two years of enactment, the Federal Trade Commission must submit a study of compliance to the committees of Congress that have jurisdiction over the Commission.

As noted previously, the Federal Trade Commission would enforce these rules, which would treat the distribution of such games by publishers and online distributors as an unfair trade practice. State attorneys general would also be authorized to file suit against companies to defend the residents of their states.

If ultimately enacted, it would be the first law in the U.S. to specifically regulate the use of loot boxes and microtransactions in games. Should you have questions regarding loot boxes or this proposed legislation, please contact authors Karl Rutledge at krutledge@lrrc.com, Glenn Light at glight@lrrc.com, or Mary Tran at mtran@lrrc.com.