EA Games latest legal troubles over loot box and surprise mechanics
The debate over whether or not loot boxes should be allowed isn’t new – for quite some time, legislators around the world have been debating what to do about the issues that loot boxes present. The first and foremost one is the gambling aspect – companies like EA have a long history of not revealing the odds of receiving rarer items in those boxes, leading people to spend unreasonable amounts on them.
Then there is the fact that these boxes are often available in games played by underage kids – and underage gambling is illegal just about everywhere. The whole loot box debate presented enough of a problem that the country of Belgium banned them entirely in 2018.
The kick-off for all the legislation was an EA game as well – Star Wars Battlefront II. Important characters were locked behind a serious paywall, and players were pretty outraged. As a result of the scandal, EA suspended the loot boxes, and Belgium outlawed them.
Lawsuit in Canada
A class-action lawsuit was recently filed in Canada, alleging that EA is profiting from an illegal gambling business with their randomised loot boxes. Two customers of the company that bought boxes for Madden NFL and NHL games respectively filed the suit on behalf of everyone who has bought those boxes since 2008.
If the suit is successful, this could mean a painful penalty for EA. The suit refers to other precedent cases around the world, some of which are also directly related to EA – such as the regulation of loot boxes in Korea and Japan, the ban in Belgium and the Netherlands, and the ongoing inquiries into potential bans in the UK and US.
There is quite a lot of precedent there, but that is by no means a guarantee of success – that will later be determined by a court. The same is true for the US, where earlier this year, a similar lawsuit was filed against EA, specifically over the Ultimate Team mode in their sports games. The American lawsuit is for damages exceeding $5 million, and is also a class action on behalf of over 100 people.
An appeal in the Netherlands
Other countries are further down the path of EA’s legal trouble – the Netherlands recently reached a verdict over EA’s FIFA series. A court in the Hague enabled the Dutch Gambling authority to enforce a fine originally imposed in 2019. The decision could result in major changes to the game.
EA was given three weeks from the order in mid-October to make the necessary changes to FIFA 19, 20 and 21 in order to escape the fine. Should they refuse to comply (two weeks in, no changes have been made) they can be fined $500.000 per week, up to a total fine of $10 million.
Under Dutch law, the loot boxes were found to be illegal as they are a game of chance, which violates the Gambling Act in the Netherlands. EA has appealed the decision that has been made, suggesting they may not even be trying to comply – no surprise given that the Ultimate Team mechanic in the FIFA games alone makes EA a billion dollars per year worldwide.