Plaintiffs John Coffee, Mei-Ling Montanez, and her minor child, S.M., filed a class action complaint against Google over gambling-related purchases available in the Google Play store. The complaint accused Google of allowing children to gamble through games available in the Google Play store, allegedly in violation of California legislation. The plaintiffs equated Google’s tactics to “Big Tobacco’s ‘Joe Camel’ advertising campaign.” They claimed that “Google relies on creating addictive behaviors in kids to generate huge profits for the Company.”
The complaint said “[a] large percentage of Google’s revenues from Google Play store games come from the in-game purchases of what are known in the gaming industry as ‘loot boxes’ or ‘loot crates.’” Loot boxes can be purchased with real money; they are “randomized chances within the game to obtain important or better weapons, costumes or players…or some other in-game item or feature that is designed to enhance game-play.” However, “buying a Loot Box is a gamble, because the player does not know what the Loot Box actually contains until it is opened.” The plaintiffs note that most Loot Box content tends to not be that desirable because it is easy to obtain or a player already has that content; the desirable content can be difficult to obtain or expensive. Further, the “Loot Boxes have all the hallmarks of a Las Vegas-style slot machine, including the psychological aspects to encourage and create addiction – especially among adolescents. Moreover, under California law they constitute illegal ‘slot machines or devices’ when played on a mobile phone, tablet, computer, or other similar device.”
For example, plaintiff S.M has been “induced to spend his parents’ money to purchase ‘Loot Boxes’ in-game” while playing a game on a smartphone. Mei-Ling Montanez “estimates S.M. has spent more than $100 on in-game purchases including Loot Boxes. The money spent on Loot Boxes was done in exchange for the random-chance possibility of winning valuable items in-game.” S.M. was able to purchase these items with his parents’ credit card that was on file with the Google Play App store. Moreover, no parental consent is required to purchase these items. Montanez claimed that her son fell victim to this “scheme,” which is allegedly “designed to hook children into spending money on the game.” Furthermore, while these games are “free,” they may be free to download, but not fully free to play because of these induced allegedly purchases.
According to the complaint, various games, including Mario Kart Tour, FIFA Soccer, Roblox, Brawl Stars, Final Fantasy Brave Exvius, and others use loot boxes. The Loot Boxes rely on a “variable rate enforcement” reward structure, which “results in people quickly acquiring behaviors and repeating these behaviors frequently in hopes of receiving a reward.” For example, “purchasing and opening a Loot Box – by design – is visually, physically, and aurally stimulating. Opening a Loot Box gives the player a rush; the moment of anticipation followed by release. The Loot Box mechanism has been proven to be effective on adults, and its effects are only intensified when used on minors who are more prone to engage in risk-taking behaviors, more prone to gambling addiction, and “are less equipped to critically appraise the value proposition of these schemes.”
Google has financially benefitted from minors making in-game purchases through the Loot Boxes. The plaintiffs claim this conduct violates California legislation because it “constitutes gambling.” Moreover, some countries, such as Belgium, the Netherlands and Japan have banned Loot Boxes because they violate their respective gambling laws. Some U.S. states, such as Hawaii, Minnesota, and Washington have also proposed banning loot boxes.
As a result of this alleged conduct, Google is accused of unlawful and unfair business practices in violation of California’s Unfair Competition Law. The gambling practices are prohibited in the “California Business & Professions Code §§19800, et seq., California Penal Code §§330, et seq., the Illegal Gambling Business Act (18 U.S.C. §1955), and the Unlawful Internet Gambling Enforcement Act of 2006 (31 U.S.C. §§5361-5367).” Additionally, Google allegedly engaged in unfair and deceptive acts and practices in violation of the Consumers Legal Remedies Act. The plaintiffs also claim unjust enrichment against Google.
The suit is filed in the Northern District of California. The plaintiffs are represented by The Law Offices of Andrew J. Brown, as well as Blood Hurst & O’Reardon, LLP.
