Apple & Google Face Class Action Lawsuits Over Loot Boxes

A few days ago, class action lawsuits against both Apple and Google were filed in the US Northern District of California Court, alleging unfair business practices stemming from violations of California statutes on gambling. Aside from the litigants’ names and some minor differences in examples and public-facing statements, the text of the two suits is virtually identical.

The venue for filing the suits was chosen because both Apple and Google have their corporate headquarters in Northern California. And the rationale for the suits relies on what is arguably a highly creative interpretation of gambling statutes explicitly related to slot machines as defined in California Penal Code, §§ 330a, 330b & 330.1. According to the suit, California has a three-part test for illegal gambling devices:

    1. It is a machine, apparatus, or device (which need not be coin-operated)
    2. Something of value is given to play the device
    3. The player has the opportunity to receive something of value by any element of hazard or chance (the clause “something of value” being applied to anything from tokens to “merchandise”)

The suit is mostly trying to prove that Apple and Google are liable for predatory game mechanics put in place by third-party developers. Since Apple created the App Store for iOS, and since Google created the Play Store for Android, the suit argues that they are liable because they have facilitated the acquisition of games that violate those California gambling statutes. The lawsuit against Apple points out it does not abide by ESRB ratings. In contrast, Google only publishes the age-related ratings for titles, and neither goes into any details about the existence of loot boxes within specific games.

It seems the relevant portions of the cited penal code are excessively broad. Technically, if a comic book store imported a Japanese gatchapon machine and people got a figurine from it, the store would be violating those statutes. Whether the suits get the jury trial, they are requesting or if the cases will be dismissed is anybody’s guess at this point.

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