US Federal Trade Commission agrees to investigate loot boxes

November 27, 2018 The Federal Trade Commission has agreed to investigate loot boxes and their effects on children.

US senator Maggie Hassan has pushed for increased scrutiny on loot boxes in the past, and has today asked the Federal Trade Commission to commit to an investigation and education project. This undertaking would see the FTC work to see what effects loot boxes have on kids, and to inform parents about potential dangers including addiction.

“Given the seriousness of this issue,” Hassan says, “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.” FTC commissioners responded affirmatively when asked if they would commit to undertaking the project and keeping the congressional committee informed of developments.

Hassan describes loot boxes as “endemic” to the videogame industry, citing unspecified research estimates in saying that they’ll be bringing in $50 billion by 2022. She cites another report from the UK Gambling Commission “finding that 30% of children have used loot boxes in video games. The report further found that this exposure may correlate with a rise of young problem gamblers in the United Kingdom.”

While that report did note that 31% of teenagers had opened loot boxes – and the link between loot boxes and child gambling remains a point of international concern – the UK Gambling Commission was quick to clarify last week that it had not investigated any link between loot boxes and problem gambling among children.

You can hear Hassan’s comments in full via C-SPAN‘s recording of the hearings. Earlier this year, Hassan questioned potential nominees to be Federal Trade Commission Commissioners about their stances on topics including loot boxes, and many of those nominees are among those addressed today.

In those earlier remarks, Hassan praised reports on the ESRB calling it one of the most effective voluntary enforcement boards. “That’s why I’m confident that the ESRB will take this issue seriously,” she said, indicating that involvement from the Trade Commission would only be necessary if the ratings board fails to adequately address the issue.

In a letter to ESRB president Patricia Vance, Hassan requested action on the issue of loot boxes, saying that ”while there is robust debate over whether loot boxes should be considered gambling, the fact that they are both expensive habits and use similar psychological principles suggest loot boxes should be treated with extra scrutiny. At minimum, the rating system should denote when loot boxes are utilized in physical copies of electronic games.”

Shortly afterwards, the ESRB started issuing an ‘in-game purchases’ label on certain titles – an almost impossibly broad moniker that applies to nearly every modern videogame. Clearly, opponents of loot boxes are not satisfied with that response.