On 1 July 2022, the Spanish Ministry of Consumer Affairs published a draft Bill to specifically regulate loot boxes, which are randomly-generated in-game rewards. Spain is expected to be the first country in the EU to specifically regulate them.
Background
The Spanish Minister of Consumer Affairs recently announced that Spain would be the first country in the European Union to specifically regulate loot boxes. The draft Bill defines loot boxes as features embedded in video games which offer users the possibility to obtain randomly-generated virtual rewards or prizes that can be purchased in the videogame.
The draft Bill highlights the structural and psychological similarities between loot boxes and gambling. The latter is already regulated under the Spanish Gambling Act 13/2011, but the particularities of loot boxes call for their own regulatory framework.
Scope
The aim of the draft Bill is to prevent addictive behaviour, protect the rights of vulnerable groups such as minors, and safeguard users’ rights.
The draft Bill will apply to those loot boxes whose access or activation is offered to the residents in Spain. It will also apply to advertising and promotion of loot boxes.
Obligations of video game companies
The draft Bill sets out the following key obligations:
- Advertising about loot boxes – Advertising may not encourage impulsive or thoughtless use of loot boxes, include misleading statements about the possibility of being rewarded, or suggest that repetition of the game may increase the chances of getting a better reward. Advertising must include a statement encouraging moderate participation in loot boxes and warning against minors accessing them. The broadcasting of such advertising may only take place between 1am and 5am.
- Information obligations – The draft Bill sets information and transparency obligations. Users have the right to obtain clear and accurate information on the terms of use and the probability of obtaining a reward when accessing loot boxes. Users will also have the right to know, at any time, the number of loot boxes activated as well as the amount and time spent using them. Companies will need to provide specific information for safe use of loot boxes, including information on the risks arising from thoughtless or impulsive activation.
- Self-exclusion mechanisms – Companies will need to enable self-exclusion mechanisms allowing users to temporarily suspend the activation of loot boxes for a period of 3 months to 5 years. Once set, this period may not be changed.
- Expenditure limits – Companies will need to offer users the possibility of limiting their spending in loot boxes. These limits may not be changed for 3 months after being set.
- Loot box session – Companies will need to enable sessions for users to set the maximum time and amount of money they are willing to spend before accessing each loot box session. Users will not be able to access loot boxes unless this session has been set. When setting the session, users will also be able to temporarily restrict their access to a future session.
Protection of minors
The draft Bill prohibits access to loot boxes by minors (i.e. anyone under the age of 18). In this regard, companies will have to verify the users’ ID before they access the loot boxes. The ID verification mechanism may include biometric identification systems.
Companies will also have to ensure there are parental controls that can be used to block access to loot boxes.
Next steps
The draft Bill will be open for public consultation until 23 July 2022. Citizens and stakeholders may submit their views to the Spanish General Directorate for the Regulation of Gambling via dgoj.sgregulacion@ordenacionjuego.gob.es.
Following the public consultation period, the draft Bill will be discussed in Parliament and thus likely be subject to changes until the law is passed.
For further information, please contact:
Ceyhun Pehlivan, Linklaters
ceyhun.pehlivan@linklaters.com
