As I was writing our Lawful Neutral expose of Nerd Kingdom a few weeks ago, I was pretty bothered by the conduct of the company. For an MMO studio that had sold itself to crowdfunders as being different and not like those other companies, it ended up being significantly more shady than most of those other developers it was disparaging. And beyond platitudes about judging a book by its cover, the whole ordeal got me thinking about how gamers likewise often accuse developers of shady, nefarious, and even illegal activity.
Players love to fling accusations of false advertising, scam, vaporware, fraud, bribery, and pyramid schemery at games we feel haven’t lived up to their promises to us. But what do those things actually mean, and is the behavior we see from game developers actually illegal? In this week’s Lawful Neutral, we’ll take a look at one of the most common accusations lobbed against them: false advertising.
The reasonable consumer
Advertising law relies on the “reasonable consumer” standard. The reasonable consumer standard asserts [4] that the law should look at the advertisement as part of the intended audience, not as legal professionals. This reasonable consumer standard is also very important for us to understand the general criteria for something to qualify as false advertising; when evaluating whether something is false advertising for MMOs, we have to consider how that advertising is evaluated by a “reasonable consumer.” In our case, that’d be how the average MMO gamer would react to the advertising. This definition is problematic because it’s damn hard for an outsider to decide what reasonable is in a subculture in which he or she has no experience, but it’s better than nothing in most cases.
False advertising
While the standard for false advertising may vary between federal and state authorities, there are some qualities that must be met to be considered false advertising under the law:
- The advertising has to be intentionally false or misleading;
- The falsity has to be material – generally meaning that company lied about something important;
- The consumer actually saw the false advertising; and
- The consumer relied on the falsity to make the purchase.
Let’s look at perhaps the most oft-cited example of false advertising: World of Warcraft‘s Dance Studio, which was advertised as part of the Wrath of the Lich King expansion. False advertising has a quality of intentionality to it, meaning that the company has to have to intended to falsify or mislead. In the case of the Dance Studio, Blizzard would have had to advertise the dance studio without any intent of ever delivering it. If pushed, Blizzard would likely be able to produce design documents, unreleased code, marketing materials that demonstrate it had the full intent of delivering the dance studio, which is why the standard doesn’t apply.
Often times what happens is that a developer announces a feature before it’s fully fleshed out to build hype for the game but can’t actually deliver the feature once it gets into the development. In most cases like this, the advertising fails the first criterion: It wasn’t intentionally false or misleading because the company had the intent at the time of the advertising to deliver the feature.
The second criterion is that the falsity has to be material, so it has to be important to a reasonable consumer. This gets a little fuzzy in our use case because its not clear whether Dance Studio was important to the community at large. Undoubtedly for some people, it was legitimately important, but do those people meet the “reasonable consumer standard” if they are in the minority? It’s not very clear, but my sense is that Dance Studio was seen as ancillary to the overall WoW experience. I think it would be very hard in this case to succeed in proving the falsity was material.
Where people often get tripped up here is the material requirement combined with the reasonable person standard. We assume that because it’s very important to us as a particular group that it’s material to everyone’s enjoyment of the game. We wax anecdotal to justify our points and assert the materiality, but the larger game community often doesn’t care to the same degree. In other cases, the feature could just be an extra and the developer could claim it was targeting a different audience in its advertising than the one that’s upset. In other words, it attempts to redefine the reasonable consumer to ensure that the feature couldn’t be considered material.
The third criterion is pretty easy to establish: Lots of people saw the advertisements, which is part of the reason that it’s still a bit of a sore subject so many years after the fact. People saw the Dance Studio advertised and were super excited about the feature! So we can say pretty easily we meet this criterion. It makes sense here — you can’t claim false advertising for advertising that you never saw.
The forth criterion is that the customer relied on the falsity to make the purchase. How many people only purchased Wrath of the Lich King because of the Dance studio? Not many. I’m sure there are a few people out there because MMOs appeal to all types, but it’s a minority who made a purchasing decision based on the Dance Studio. Not only that, the customer has to be able to prove they made a purchasing decision on the Dance Studio. That is going to be difficult to prove reliance in this setting for such a minor feature — since our “material” requirement is fuzzy. Also since its unlikely that we could prove that the Dance Studio was material to the game or to the community, we also therefore can’t make the assertion that a reasonable consumer relied on the falsity to make the purchase.
So in the case of the Dance Studio, I don’t think there’s a false advertising case. When gamers summon this example of “false advertising,” they’re merely being hyperbolic.
What about the canvas bag?
In the case with the canvas bags in Fallout 76 collector’s edition, the story is a little different. Let’s apply the same criteria to the canvas bag fiasco:
- Intentionally falsified or misleading – Looking at the Bait and Switch type of false advertising, we actually have some grounds here with the “actual item not pictured.” Bethesda showed a picture of a much higher-quality bag than the one that was delivered. There was no verbiage on the ad to convey that what was pictured was not what was going to be delivered, so here I think it qualifies as intentionally misleading as to the quality of the bag.
- Material to a reasonable consumer – I think we have a pretty solid case here as well. While the canvas bag might have been immaterial to the game overall, it was material to the actual collector’s edition. It was an important part of the extra amount you were paying for the additional swag.
- Saw the advertisement – Again, this one is generally a gimmie. Of course you saw the advertisement; it’s why you made the purchase to begin with.
- Relied on the falsity to make a purchase – This reliance is again hard to prove, but there was a significant difference in quality between what was advertised and what was delivered. It’s within the realm of possibility to say that people purchased the collectors edition solely to get the branded bag. It’s still not a guaranteed argument, but it’s more feasible than the Dance Studio.
I think Bethesda agreed that it could potentially be in some hot water here, which is why it back-tracked relatively quickly and promised to make amends. While I can’t attribute any particular motivation to Bethesda here, I’m going to maintain that a potential class-action lawsuit over a canvas bag was at least on its mind, and thus the great global canvas shortage of 2018 was brought to an end.
So there we go. “False advertising” is far from an exact science – just look how hard it turned out to be to prove in No Man’s Sky’s case – but I think most of the time when gamers lob false advertising accusations at a developer, they fall more in line with the Blizzard example than the Bethesda example. It’s hard to prove under the best of circumstances, and the standards guiding false advertising are open to broad interpretation. But it’s a starting point — a list of criteria to start with if you think a developer might have tried to pull the wool over your eyes.
Every other week, Andy McAdams braves the swarms of buzzwords and esoteric legalese of the genre to bring you Massively OP’s Lawful Neutral column, an in-depth analysis of the legal and business issues facing MMOs. Have a topic you want to see covered? Shoot him an email!
Reading this, I think the law is likely far too complex and poorly written to function properly. That is certainly nothing new, but in this case the problem points seem to be the first and fourth.
The first point has some importance in protecting honest business. However, there’s also a negative with pre-advertising things that aren’t assured yet. Where some of that is important to generating interest, the counter is that now so long as some ‘effort’ is shown we get companies that can advertise just about anything and declare it not feasible. “But we really did try!” As such, some changes around this point are essential to the trust of consumers… not that this is where we decide upon and change laws (and good luck with that, that place is too busy with their own personal projects).
The fourth point is a problem in entirety. Simply put, it is impossible to say whether somebody purchased due to the advertising falsehoods or not. Since there is always a reasonable doubt, there would never be any guilt based upon our systems applied properly. The way this is written it is essentially a get out of jail free card. It just needs to go away. Far better would be a measure of reasonable usage (aka, the person who sees the problem and doesn’t use the product for long is very different than the person who, in one of these cases, has hundreds of hours of use). The difficulty there would be that some objects would have to be used to see the falsity, and so it would be entirely based upon how much use one would have to partake to notice the issue (in the case of these games, one could say no use might be the standard, but then the issue of collector edition vs. normal becomes even more of a distinction).
Anyway, these are the two points of the law which I find untenable. They are among the many such problems with law in our nation, not alone but certainly in need of being fixed. It is too bad our government is ‘too busy’ to ever actually fix the laws…
I never looked at the Dance Studio as false advertising…rather something Blizz was unable to do at the time, and unable to/couldn’t bother to do now. And there seems to be a few other cases like this during WoW’s tenure. So it was never case to me to mislead, rather the devs where biting off more than they could chew within the limits of the game’s structure and mechanics. /sigh
How does this tie into fraud, it seems like there would be situations where they would be linked, especially if the first criteria is a purposeful intent to mislead.
False advertising is a type of fraud
I think the “saw the advertisement” may be to protect from hearsay.
Like hearing about Dance Studio or the canvas bag from a friend, but never actually seeing the ad firsthand until after the purchase is made. So the purchase was based off of a third party and not the actual ad itself.
That is an interesting article and thank you for writing it. I am not a lawyer but I do have an interest in consumer issues and so on thanks to a previous job so I am always somewhat interested in reading other takes on such things.
If I might make a suggestion for future articles, please can you make clear what countries laws you are applying beyond a couple of buried links within the article.
Simply assuming that everyone knows you are (in this case) using US law could lead someone not from the US to a conclusion that doesn’t apply to them if they don’t read the entire article and / or follow the buried links.
While I don’t think anyone will start a law suit based on what they have read on MOP I do think its good practise when discussing laws to clearly signal the origins of what is being discussed to avoid any potential confusion.
Thanks again and look forward to more articles.
Hey BBB – I will make an effort to do that going forward. I made (bad) assumptions about the US law because I’m more familiar but I need to be more deliberate about where the bits I’m talking about apply.
Curiously though, is there really much difference between US law and UK law (where Mr. Bal’s hearkens from I believe) beyond differing terms and spelling there of in regards to this? As I am pretty sure game companies can’t rip players off over *there (with an advert) as over *here (with a commercial). o.O
*Note: I am not from over here or there myself…just to be clear. >.<
AFAIK the UK, like the rest of Europe, has far more comprehensive consumer protection laws than the US; if I remember correctly, on the false advertising front it goes as far as considering anything said by anyone authorized to speak for the company, for example in an interview, as advertisement for the purpose of punishing companies for false or misleading advertisement.
The US has another issue in that a number of laws are defined on the state level, rather than the federal level. An interesting example of that is that in California a strong privacy law, similar in strength and scope to Europe’s GDPR, will go into effect in January 1, 2020, whereas in the rest of the country privacy laws will still remain far more lenient than that.
Indeed. Some of the differences are good. Some of them… are essentially impossible for businesses to actually meet, and have resulted in businesses simply stopping service to the EU/UK. It’s interesting to see the nuances of it, but GDPR would certainly make me (assuming I owned a business) think twice whether the market was worth the cost. There were quite a multitude of shutdowns, and then there’s the entire idea that somehow scaling fines make it equitable to smaller businesses (which doesn’t consider personnel costs to even try to comply). Much less any measure of there being leniency for good faith efforts there.
Simply put I believe that there has to be a better balance point. Personal information and protection of such data is important, but it is not the end all of the matter.
This depends on where you live. For example, AFAIK in Europe it doesn’t matter if there was intent to deceive or not; if the advertisement contains the false information, even if the false information was only included due to excusable mistakes or even unforeseen circumstances, then it could entitle the consumer to some kind of compensation.
I see no issue with this.
False Advertising and Gaming is probably one of the oddest ducks to try and tackle…
Fallout 76 and the bungled, story mess that it is? It’s easy to hit with False Advertisement because what was one of the main complaints was something they released as a tangible and physical product. The Canvas bag may not be the ‘sole’ reason to get the collector’s edition, but it is a major incentive.
But arguing a game was false advertised? No Man’s Sky was under investigation for that, but ultimately cleared… even if I find some of the rulings on it a little weak when much of the argument then being ‘it’s procedural, so it’s probably in there’. But, look back before that? Aliens Colonial Marines was similarly struck–twice. One by the organization who handled the NMS ruling in Europe, who agreed with the false advertisement and enforced Sega to… add disclaimers to footage many months old by that point. As well as the lawsuit filed in the US that saw Gearbox ultimately throw a tantrum, throw blame, then throw Sega under the bus before it went to a settlement.
We’re talking about an industry that regularly uses Bullshots to sell games too. The Anthem trailer that was so famous for introducing us to the game? Cobbled together and largely all fake with little basis in what they even had manageable at the time. Any time you see gameplay where people are talking or ‘interacting’ like said Anthem trailer, or The Division? Yeah, nobody is really doing anything in those. It’s not live play, it’s definitely not natural speech, and it definitely totally and absolutely not rehearsed fifty in a VO booth before they deliver ‘Hey, I found the Infinitely Undiscovered Blade off this totes bad dude. Sa-weet.’ in a way the directors wanted it to sound.
And it’s hard to think of examples for this… because it is just so dang wide-spread! Sometimes you won’t notice it until release (like Watchdog’s) or… it’s obvious even at a glance because you can literally see someone gave up halfway into erasing a character from the background so there’s just half a guy standing about.
And it can be innocuous like a slight graphical downgrade, or outright damning… again, like Colonial Marines.
It is iffy – for sure. And in the US we have federal laws, and then state laws that all govern false advertising–and it’s actually a lot broader than I went into here.
A lot of the documentation I read about the US laws said that False Advertising happens all the time, but advertisers get around it with small-print disclaimers or because no one puts enough of a fuss to make them fix it. Plus the whole definition relies on three ambiguous concepts – reasonable consumer, materiality, and reliance.
Oh, definitely! I’m far from a law expert myself–just someone with an interest in the industry and a decent memory. It’s easy for anyone whose watched more than a few trailers to start to ignore the ‘gameplay is from an alpha state’ or the like with gaming… Disclaimers get tunnel-visioned hard.
But from examples like I listed? It’s a hard argument when a difference is night and day. And like you mentioned in the article, the definitions rely on a concept that is fine and dandy for material goods but not so much so when you deal with something fluid and adaptable like gaming, MMO or not. Which is why you’d have a far easier sell claiming that Fallout 76’s Canvas-to-Nylon bag was false advertising than… say… Aliens: Colonial Marines or No Man’s Sky being false because entire systems seem to be missing.
And why I mentioned those latter two especially, since its part of what is interesting with the laws as well as why so much of the law–not just advertisement–needs an updating to keep up. And those examples have risen enough to become a blip on things. Whose to say consumer experience isn’t negative due to a ‘bug’ or glitch where enemy spawning and AI was borked hard due to ‘tether’ being spelled as ‘teather’? Or that someone was just so ungodly unlucky with the procedural generation that they never were near an area that spawned massive fleet battles and giant sand worms? Or that such stuff was delayed, and necessitated a patch at a later time but will totally be in there?
I’m now reminded of a thing that I mostly see when looking at presentations, etc. from the (business) software maker Salesforce (but less from other companies): a “Forward Looking Statement”, which (in every presentation or video) is a full page of legalese (please google the phrase for full examples).
Important part: “This presentation may contain forward-looking statements that involve risks, uncertainties, and assumptions. … Any unreleased services or features referenced in this or other presentations, press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements.”
Of course, it’s not an advertisement, but imagine if Blizz or any other company always included a page like that… not sure if it would be good or bad or even work (as people just tend to skip pages with such dense statements).
I actually think the ‘purposeful’ and ‘relied upon to purchase’ parts are worse. Simply put, anyone with half a brain could argue against those as nothing but speculation, especially with a little bit of CMA applied, regardless of the time at which is was actually produced.