FTC Agrees to Investigate Loot Boxes

During a meeting yesterday with the Senate Commerce Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security , the United States Federal Trade Commission confirmed that they will investigate loot boxes. FTC chairman Joseph Simmons, who announced this plan, was asked to begin the investigation by Senator Maggie Hassan (D-N.H.), who previously raised concerns about loot boxes.

No word on further FTC details

In yesterday’s hearing, Hassan cited a recent report from the UK Gambling Commission that found 31% of those surveyed have paid money to open a loot box. She also cited efforts by other countries (such as Belgium) to limit loot box usage in games. She added:

Given the seriousness of this issue, I think it is in fact time for the FTC to investigate these mechanisms to ensure that children are being adequately protected and to educate parents about potential addiction or other negative impacts of these games. Would you commit to undertaking this project and keeping this committee informed about it?

Simmons responded in the positive, but didn’t go into further detail on the FTC’s stance on loot boxes. Despite some vocal criticism, regulators seem to be leery on getting involved in the debate.

Hassan has raised concerns about loot boxes before. Back in February, she wrote an open letter to the ESRB urging them to “review the completeness of the board’s ratings process and policies as they relate to loot boxes, and to take into account the potential harm these types of micro-transactions may have on children”. She had also asked them to conduct a study to research the reach and impact of loot boxes. Also, she asked some FTC nominees if they would be willing to examine the loot box issue. They all said yes, but the lack of news on that issue makes it apparent that it’s not a high priority to them.

Other responses

The ESRB seems on board with keeping an eye on loot boxes. Shortly after Hassan’s letter, they added an “in-game purchases” label to games with loot boxes.

However, the Entertainment Software Association, which oversees the ESRB, is more reluctant to act on them. Back in May, ESA president Michael Gallagher defended loot boxes, and claimed that regulating them as a form of gambling “challenges our industry’s freedom to innovate, and impairs our ability to continuously test new business models, which drive creativity and engagement with our audience”.

Polygon asked the ESA for comment on the latest round of talks. They said:

Loot boxes are one way that players can enhance the experience that video games offer. Contrary to assertions, loot boxes are not gambling. They have no real-world value, players always receive something that enhances their experience, and they are entirely optional to purchase. They can enhance the experience for those who choose to use them, but have no impact on those who do not.