Class action lawsuit alleges Apple promotes gambling via lootboxes through its storefront

    
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Legal moves are being made against the practice of lootbox monetization against one of the largest targets possible. A class action complaint filed with the U.S. District Court for the Northern District of California against Apple is claiming that the company is complicit in promoting gambling by selling games on its App Store that have lootboxes — a violation of California law under section D.

The complaint directly targets Apple as a result of the company getting a slice of the profit from lootbox sales. “Over the last four years [Apple’s] App Store games have brought in billions of dollars, even though the vast majority of the games are free to download,” reads part of the complaint. “Dozens (if not hundreds) of App Store games rely on some form of Loot Box or similar gambling mechanism to generate billions of dollars, much of it from kids.” The suit also points out that while Apple now requires App Store games to share lootbox odds, it doesn’t point out on its storefront which games have the monetization scheme.

The class action seeks restitution and disgorgement of the money collected via lootbox purchases, an injunction against further violations, and court fees.

source: Apple Insider via Engadget, thanks to Ville for the tip!
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Techno Wizard
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Techno Wizard

I don’t see lootboxes as gambling. Gambling itself has been watered down to the point of trolling by the cancel culture PC crowd.

Mordyjuice
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Mordyjuice

All they have to do is prove a kid used lockboxes on some E for Everyone title and you’ve got your self a Person’s Under 18 Gambling situation if it was done on a device registered to the minor.

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Raventharke

((Deleted at commenter’s request.))

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Mr.McSleaz

You’re a special kind of Ignorant.

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Raventharke

((Deleted at commenter’s request.))

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Bruno Brito

So, did all this babbling made sense inside your head?

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Raventharke

((Deleted at commenter’s request.))

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Utakata

Thankfully the courts don’t really decide on “sounds likes”. So you and yours people cant take a chill pill..and allow the legal process do it’s job without the need of opinions from the internets to get in the way. Just saying.

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Raventharke

((Deleted at commenter’s request.))

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Utakata

Well, that’s surprising… o.O

Mordyjuice
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Mordyjuice

Look everyone I found Tucker Carlson!

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Fervor Bliss

If you spend time with baby’s, you have to deal with the diapers.

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Arktouros

may become entitled to receive money, credit, allowance, or other thing of value or additional chance or right to use the slot machine or device, or to receive any check, slug, token, or memorandum entitling the holder to receive money, credit, allowance, or other thing of value.

(from the code)

This again is where everything will hinge.

The companies will argue that nothing you purchase has value because you can’t resell it for value and it only has value within the context of that environment. That’s if they’re not smart and just straight up point out you don’t actually own anything you’re buying as you’re really just licensing everything from them and they still own everything and they can ban you anytime you want and you agreed to all that to use their services.

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Schmidt.Capela

Depends on how the courts will define “thing of value”. If you include in that definition things that have no resell value but are seen as valuable by the person — such as, say, lootbox prizes — then Apple will likely lose.

(That the lootbox prizes have value for the consumers buying the lootboxes is self-evident by the fact they are paying real money for them.)

BTW, back in 2018 the U.S. Ninth Circuit Court of Appeals ruled that an in-game token that could be purchased with real money but never could be cashed out (without violating the game’s TOS), whose only use was to pay for in-game activities, nevertheless met the definition for “thing of value” when it comes to gambling (with the caveat that the situation was more clear-cut because the game was literally a virtual casino).

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Arktouros

The courts decision will essentially be the definition as currently that’s whats at dispute here. Players demand that because they pay money for something it has value. Companies demand because they own everything and it only exists in a virtual environment then it has no value.

Your argument that lootbox prizes having value is self-evident is flawed because you ignore the fact that you don’t own anything you pay money for in a digital environment. You are not exchanging money for goods, you are exchanging money to use something that the company still owns. You even agree to this typically with terms of use agreements that no one ever reads. Companies aren’t quick to point this out in most disputes because reminding everyone that you don’t own anything you buy is a pretty bad move.

That’s also a pretty huge caveat as often times loot box rewards in games tend to be more indirect. A virtual casino selling gamble boxes with varying rewards of casino chips is observably a lot different than a fantasy game that sells you a gamble box with a mount skin or sword skin.

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Schmidt.Capela

Your argument that lootbox prizes having value is self-evident is flawed because you ignore the fact that you don’t own anything you pay money for in a digital environment.

Nope, because what I said is that the lootbox prizes have value for the consumer; this only requires that the customer is able to enjoy, in some way, the prize, so doesn’t require the prizes to be owned by the customer at all.

Defining “ting of value” like that — requiring only that the person find the prize valuable, regardless of whether it has real world value or not — is how Belgium decided that lootboxes are gambling according to their current legal framework, despite their definition of gambling itself being nearly identical to the ones found in other countries.

A virtual casino selling gamble boxes with varying rewards of casino chips is observably a lot different than a fantasy game that sells you a gamble box with a mount skin or sword skin.

I sincerely see no difference here. In both cases the company is offering as lootbox prizes items that only exist, and can only be enjoyed, in-game. The casino one is only more explicit in that the whole purpose of that game was to simulate the experience of going to a casino, but the nature of what it was doing isn’t in any way different than what other game companies do when they sell lootboxes.

BTW, Apple might be in more trouble than I originally thought. According to GamesIndustry.biz,

Importantly in this case, the item of value is not limited to coins, bills or tokens; under the California Penal Code definition, it can extend to ” free replays, additional playing time, redemption tickets, gift cards, game credits, or anything else with a value, monetary or otherwise.”

In other words, the applicable law explicitly states that “thing of value”, for the purpose of gambling, includes things with no monetary value.

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McGuffn

Legally, this probably isn’t going anywhere until something happens to lockboxes themselves but its an interesting change in tactic. The storefronts may be more pliable than the game companies themselves.

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Kanbe

It also targets and deals with one company this way instead of hundreds. I think that helps their odds but overall I don’t see this going anywhere either.