September 19, 2019

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FTC Loot Box Workshop Announced

The Federal Trade Commission FTC has announced that it will hold a public workshop on August 7, 2019 to examine consumer protection issues related to video game “loot boxes.” As we have previously reported, loot boxes have been under scrutiny by regulators around the world. In the U.S., these issues were recently raised in a November 27, 2018, Congressional oversight committee hearing. During this hearing, Senator Maggie Hassan (D-N.H.) described loot boxes as “endemic in the video game industry,” adding that “children may be particularly susceptible to engaging with these in-game purchases, which are often considered integral components of video games.” In response, FTC Chairman Joe Simons assured Sen. Hassan that the FTC would “investigate these mechanisms to ensure that children are being adequately protected and…[would] educate parents about potential addiction.”

The workshop, “Inside the Game: Unlocking the Consumer Issues Surrounding Loot Boxes,” will bring together a variety of stakeholders, including industry representatives, consumer advocates, trade associations, academics, and government officials to discuss concerns regarding the marketing and use of loot boxes and other in-game purchases, and the potential behavioral impact of these virtual rewards on young consumers.

The workshop will cover:

The in-game transaction landscape, including the origins and evolution of loot boxes and their role in game play and the digital marketplace;

Research examining consumer behavior, including child and adolescent behavior, in the context of video games and digital transactions; and

A discussion of consumer awareness and education about in-game digital transactions, including the mechanics, marketing, and financial commitments associated with loot boxes. 

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

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James Mattinson Blockchain Technology and Digital Currency Lawyer Sheppard Mullin Washington DC
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Jim Gatto is a partner in the Intellectual Property Practice Group in the firm's Washington, D.C. office. He is also Co-Team Leader of the firm's Digital Media Industry and Social Media and Games Industry Teams, Blockchain Technology and Digital Currency team, and Team Leader of the firm's Open Source Team. 

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Mr. Gatto leverages his unique combination of nearly 30 years of IP experience, business insights and attention to technology trends to help companies develop IP and other legal...

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