Rocking the Boat: Loot Boxes in Online Digital Games, the Regulatory Challenge, and the EU’s Unfair Commercial Practices Directive

Abstract

The loot box, a feature of online video games, contains randomised virtual items of importance to gameplay. Comparisons are drawn between chance-based loot boxes and the legal and psychological definitions of gambling, leading to concerns that the format may be an unregulated form of quasi-gambling. Globally, several jurisdictions have intervened to control the loot box, some applying national gambling laws, while others have implemented more general rules, an alternative described as “consumer protection”. In 2020, a study commissioned on behalf of the EU Parliament recommended that loot boxes and in-game purchasing systems be regulated from a “consumer protection” perspective. This paper questions firstly whether the debate on product-specific rules for loot box games was conducted in reverse, commencing with a set of potential solutions, while research on harms is still at an early stage. It interrogates the “consumer protection” route, critiquing proposals that borrow from the conceptually and structurally distinct areas of gambling law and consumer protection law, without first resolving the tensions between them. The paper proposes that an alternative paradigm of “player protection” may be the better route towards solving the regulatory puzzle of loot boxes. The paper secondly argues for the EU and its Member States to adopt an interim approach, relying on existing legislation to tackle immediate concerns and facilitate testing of remedial measures, but which leaves the door ajar to alternative options, including regulation under national gambling law frameworks. It examines the UCPD as an immediate solution and considers how the updated UCPD Guidance addresses questions of potentially exploitative game design.