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FTC Plans Public Workshop on Loot Boxes, Won’t Comment on Legal Investigation (EXCLUSIVE)

The Federal Trade Commission plans to host a public workshop later this year on the issue of loot boxes in video games, according to a letter sent from commission chairman Joseph Simons to Senator Maggie Hassan (D-NH) this week.

In the letter obtained by Variety, Simons declines to comment on any sort of timeline for a FTC legal investigation into loot boxes and video games, or whether one is taking place. The existence of an FTC investigation, the identity of those involved and the findings are all considered not public information.

“I share your concerns about loot boxes,” Simons writes, “but I cannot address your specific questions about any nonpublic law enforcement efforts.”

He went on to say that the FTC has other tools available to address concerns raised.

“For example,” he wrote, “we are currently planning a public workshop on loot boxes for later this year as one non-law enforcement option. A workshop could provide a forum for stakeholders representing wide-ranging perspectives, including consumer advocacy organizations, parent groups, and industry members. It also could help elicit information to guide subsequent consumer outreach, which could include a consumer alert.”

Simons also pointed out the FTC has a “long history of consumer protection activities relating to the video game industry and children.”

“For example, at the request of the President and Congress starting in 1999, the FTC issued a series of reports on the extent to which the movie, music, and video game industries marketed violent entertainment to children. As the video game industry has rapidly evolved, we have remained vigilant for potential consumer protection issues, and we have continued outreach efforts to self-regulatory bodies such as the Entertainment Software Rating Board.”

Thursday’s letter comes in response to a letter sent by Hassan last month asking for an update on the status of the investigation, a time table, as well as proposed next steps.

About three months ago, Simons agreed to investigate video game loot boxes to ensure that children are being protected and parents are educated on the matter at the request of Hassan.

The request came about nine months after Hassan sent a letter to the Entertainment Software Ratings Board asking for the group to review the ratings process as it relates to loot boxes, examine the marketing of loot boxes to children, and put together best practices for developers around the toxic form of microtransactions. The senator also asked the board to conduct a study that further delves into the reach and impact of loot boxes in games. At the time, she said if they didn’t take sufficient action she would ask the FTC to get involved.

Last year, in response to the growing concern surrounding loot boxes in video games, the ESRB said it would continue to make enhancements to ensure parents continue to be well-informed as the industry evolves. The group did not directly address what it might do in terms of loot boxes, microtransactions, and ratings.

In November, the head of the International Game Developers Association called for the game industry to create a unified approach to its use of loot boxes.

Hassan told Variety that she supports the idea of a public workshop.

“I appreciate the FTC’s continued engagement on the issue of loot boxes, particularly in regards to the well-being of young gamers. A public workshop on loot boxes is a step in the right direction, and I encourage the FTC to continue working with consumer advocates, parents, gamers, and industry members to ensure that meaningful improvements are made to increase transparency and consumer protections around loot boxes.”

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