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Apple receives class action complaint over loot boxes


California-based parent Rebecca Taylor has filed a class action complaint against tech giant Apple, alleging that by providing games containing loot box mechanisms through its App Store, Apple is complicit in or guilty of promoting gambling products to children.

The complaint was filed in the US District Court for the Northern District of California, San Jose Division on Tuesday (15 June).

Central to Taylor’s argument was the fact that Apple provided disclosures for loot boxes similar to those for recognised gambling products.

“Even Apple implicitly concedes the Loot Boxes in its App Store games are a form of gambling,” the complaint said. “Like the California state lottery, Apple requires its App Developers to disclose the “odds of winning” particular items in the Loot Boxes for the games it distributes.”

Detailing examples of the various ‘loot box’ mechanisms which exist in some of the market’s most popular video games, the complaint alleges that Apple “engages in predatory practices enticing consumers, including children to engage in gambling and similar addictive conduct in violation of this and other laws designed to protect consumers and to prohibit such practices.”

The complaint compares Apple to “Big Tobacco” and former Camel Cigarettes mascot “Camel Joe”, claiming that the company “relies on creating addictive behaviors in kids to generate huge profits”.

It goes on to quote the Belgian gaming regulator in its criticisms of loot box mechanisms, stating that the jurisdiction’s gaming commission ruled that loot boxes fit the description of a game of chance because all of the constitutive elements of gambling are present (game, wager, chance, win/loss).

The UK’s DCMS also received a mention, in reference to a report submitted to parliament determining that loot boxes constitute gambling and encourage addictive behavior, and recommending that the sale of Loot Boxes to children should be banned.

The complaint aims to prove wrongdoing by Apple by demonstrating a consensus around the classification of loot boxes as gambling products. It details the psychological effects of loot boxes, particularly with reference to children and adolescents, and quotes further examples of studies, claiming that “virtually every study published to date on the connection between Loot Boxes and gambling has found an association”.

It argues that “Loot Boxes are a form of gambling and violate California’s anti-gambling laws. According to the California Bureau of Gambling Control, by paying for and opening Loot Boxes within the game, the game is creating a ‘gambling device.’”

The complaint also criticizes other in-game mechanics, such as the use of in-game currencies. It argues that such mechanics disconnect players from the real world and real money, encouraging them to spend more than they might otherwise.

Loot boxes have a controversial past and are being closely examined in jurisdictions around the world. In the UK, the Children’s Commissioner for England has called for loot boxes to be classified as gambling , as has a DCMS committee.

In 2018, Belgium’s government ruled that loot boxes are in breach of gambling laws, and games containing the mechanism are receiving regulatory attention in other jurisdictions such as Sweden and Australia.