Apple Faces Appeal In Battle Over 'Loot Boxes'

A California resident wants a federal appellate court to revive her lawsuit alleging that Apple wrongly distributes gaming apps that allow players to use virtual currency to purchase “loot boxes."

U.S. District Court Judge Richard Seeborg in the Northern District of California dismissed the lawsuit last month, ruling that loot boxes are not illegal in California.

Rebecca Taylor, the Huntington Beach resident who brought the case, recently filed the paperwork to appeal that ruling to the 9th Circuit Court of Appeals. Taylor hasn't yet filed her substantive arguments.

The dispute dates to June of 2020, when Taylor alleged that her son, identified only as “C.T.,” downloaded the game Brawl Stars from the App Store, purchased $25 in virtual currency, and used that currency to buy in-game loot boxes.

Taylor compared loot boxes to slot machines, describing the in-game boxes as “randomized chances within the game to obtain important or better weapons, costumes or player appearance ... or some other in-game item or feature that is designed to enhance game-play.”

She claimed in a class-action complaint that Apple was violating California laws against unfair business practices.

Apple argued that the case should be dismissed for several reasons, including that Taylor's son purchased the loot boxes with virtual currency, and therefore didn't suffer a financial injury.

Virtual currency “is for gameplay only and can never be refunded or exchanged for real money within the game or through Apple,” the company wrote in a motion asking Seeborg to dismiss the case.

Seeborg agreed with Apple, writing that the allegations against the company, even if proven true, wouldn't show how Apple caused game players to suffer economic or other injuries.

Taylor also argued to Seeborg that other countries have banned loot boxes on the theory that they pose dangers comparable to gambling.

Seeborg said in his written opinion that it's up to lawmakers -- not courts -- to decide whether to outlaw loot boxes. 

“Existing statutory law does not plainly prohibit 'loot boxes,'” he wrote. “If plaintiffs’ allegations regarding the harmful affects of loot boxes are accurate, the public interest likely lies in seeking legislative remedies.”

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