Democrats Are Bungling Call For Lootbox Laws Aimed At Kids

A group of Democrats have sent out letters to some of the biggest names in games publishing, asking them to voluntarily adopt rules soon to be implemented in the UK, designed, they say, to protect children from exploitative practices in video games. Except, that’s not what the UK code is about at all, making the entire effort extremely confusing.

Loot boxes—paid-for items in games whose contents are only revealed after paying—are now widely considered a form of online gambling, and have even been banned in some countries. However, they continue to be a prominent part of many major games, with perennial calls for better regulation. So this latest attempt isn’t anything new, but it’s certainly more strange.

As The Verge reports, Sen. Ed Markey (D-MA), Rep. Kathy Castor (D-FL), and Rep. Lori Trahan (D-MA) have written a letter to twelve major players in gaming—including Epic, Activision, Disney and Microsoft—asking that they extend the UK’s new Age Appropriate Design Code (AADC) regulation to American children, in order to protect them from loot box gambling and micro-transactions. Although they really do seem to be stretching beyond credulity what the UK code is covering.

Next month the UK brings in the AADC, meaning from September 2 the nature of data collected about children by games, websites and social media comes under far stricter regulation. While not a law, the regulations “set standards” across 15 categories, focusing on “high privacy by default,” not sharing children’s data, and keeping geolocation off by default. It goes further in requiring that “nudge techniques” not be used to coerce children into sharing further data, nor “weaken or turn off their privacy settings.”

However, the code explicitly mentions neither loot boxes nor in-game gambling, nor ever really even alludes to them. While the subjects of loot boxes and IAPs came up during the UK regulator’s research into “Detrimental use of data,” it’s not a factor of the final publication. It’s certainly a stretch to see how the content of the AADC relates to what’s raised in the letter sent to US publishers.

While the AADC is about regulating the collection and monetization of children’s data from gaming and social media, the Democrats’ letter also drops in “exposure to violent content” and “online predators,” which absolutely have nothing whatsoever to do with the code they cite. (In fact, their footnotes reference entirely different Unicef publications.) The letter continues,

“The prevalence of micro-transactions—often encouraged through nudging— have led to high credit card bills for parents. Loot boxes go one step further, encouraging purchase before a child knows what the “bundle” contains— akin to gambling. Children are uniquely vulnerable to manipulation and peer pressure associated with in-game purchases and loot boxes. Experts suggest that Entertainment Software Rating Board (ESRB) ratings and parental controls are insufficient. The AADC represents a monumental step towards child centric design by default.”

Calling for better regulation protecting children from exploitative content such as micro-transactions and loot boxes seems immediately laudable, it’s more than a little odd that they are attempting to raise these issues via the AADC, which mentions neither. In fact, the code’s references to “nudging” are specifically about manipulative techniques designed to encourage children to volunteer out of data protection, while also suggesting such nudges instead be used to increase privacy, or even promote “health and wellbeing.” Certainly nothing to do with micro-transactions.

Again, the requests the Dems are asking for would mostly be benevolent. Their desire that games aimed at children be designed in their “best interests,” and not include manipulative techniques associated with micro-transactions and loot boxes, sound positive. But attempting to piggyback it onto a foreign regulatory code that has all but nothing to do with these subjects seems weirdly deceptive. Not least when the majority of the content of the AADC is already covered by the US’s COPPA.

The real red flag, however, is that “exposure to violent content.” It’s dropped in the opening paragraph of the letter, then never even alluded to again throughout. While unlike the US the UK has enforced age ratings on games, preventing their sale to children if classified a 12, 16 or 18, that too is a whole other subject, covered by a whole different set of regulations.

The letter concludes with a rather aggressive challenge:

“It is imperative that Congress acts with urgency to enact a strong privacy law for children and teens in the 21st century. As we work towards that goal, we urge you to extend to American children and teens any privacy enhancements that you implement to comply with the AADC. We also request responses to the following questions by August 26, 2021.

1. Do you intend to make changes to your product or service’s design or data collection and use to comply with the UK Age Appropriate Design Code?

2. Will you implement these changes for users in the United States? If not, why not? If yes, will these changes be reflected on a public-facing website or in your terms of service?”

Given the completely erratic nature of the letter, it might not take much for the recipients to quickly dismiss it. Which seems a big whiff.