A bill to regulate certain pay-to-win microtransactions and sales of loot boxes in interactive digital entertainment products, and for other purposes.

II 116TH CONGRESS 1ST SESSION S. 1629 To regulate certain pay-to-win microtransactions and sales of loot boxes in interactive digital entertainment products, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 23 (legislative day, MAY 22), 2019 Mr. HAWLEY (for himself, Mr. BLUMENTHAL, and Mr. MARKEY) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To regulate certain pay-to-win microtransactions and sales of loot boxes in interactive digital entertainment prod- ucts, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. REGULATION OF PAY-TO-WIN MICROTRANS- 3 ACTIONS AND SALES OF LOOT BOXES IN 4 VIDEO GAMES. 5 (a) PROHIBITION OF PAY-TO-WIN MICROTRANS- 6 ACTIONS AND SALES OF LOOT BOXES IN MINOR-ORI- 7 ENTED GAMES.— 8 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 2 •S 1629 IS (1) GAME PUBLISHERS.—It is unlawful for a 1 game publisher to publish— 2 (A) a minor-oriented game that includes 3 pay-to-win microtransactions or loot boxes; or 4 (B) an update to an existing minor-ori- 5 ented game that would enable pay-to-win micro- 6 transactions or loot boxes in such game. 7 (2) DIGITAL GAME DISTRIBUTORS.—It is un- 8 lawful for a digital game distributor to distribute— 9 (A) a minor-oriented game that includes 10 pay-to-win microtransactions or loot boxes; or 11 (B) an update to an existing minor-ori- 12 ented game that would enable pay-to-win micro- 13 transactions or loot boxes in such game. 14 (b) PROHIBITION ON PUBLICATION OR DISTRIBU- 15 TION OF VIDEO GAMES CONTAINING PAY-TO-WIN MICRO- 16 TRANSACTIONS OR PURCHASING LOOT BOXES WHERE 17 THE PUBLISHER OR DISTRIBUTOR HAS CONSTRUCTIVE 18 KNOWLEDGE THAT ANY USERS ARE UNDER AGE 18.— 19 (1) GAME PUBLISHERS.—It is unlawful for a 20 game publisher to publish an interactive digital en- 21 tertainment product that is not a minor-oriented 22 game (or an update to such a product) if— 23 (A) such product or update contains pay- 24 to-win microtransactions or loot boxes; and 25 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 3 •S 1629 IS (B) the publisher has constructive knowl- 1 edge that any of its users are under the age of 2 18. 3 (2) DIGITAL GAME DISTRIBUTORS.—It is un- 4 lawful for a digital game distributor to distribute an 5 interactive digital entertainment product that is not 6 a minor-oriented game (or an update to such a prod- 7 uct) if— 8 (A) such product or update contains pay- 9 to-win microtransactions or loot boxes; and 10 (B) the distributor has constructive knowl- 11 edge that any of its users are under the age of 12 18. 13 SEC. 2. DEFINITIONS. 14 In this Act: 15 (1) COMMISSION.—The term ‘‘Commission’’ 16 means the Federal Trade Commission. 17 (2) INTERACTIVE DIGITAL ENTERTAINMENT 18 PRODUCT.— 19 (A) IN GENERAL.—The term ‘‘interactive 20 digital entertainment product’’ means a pro- 21 gram such as a video game that is accessed by 22 a connected device and provides an interactive 23 entertainment experience for the user. 24 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 4 •S 1629 IS (B) EXCLUSION.—Such term shall not in- 1 clude a program if— 2 (i) a user’s interaction with the pro- 3 gram is limited to selecting options from a 4 menu of choices; and 5 (ii) the program would not be consid- 6 ered a game by a reasonable user. 7 (3) DIGITAL GAME DISTRIBUTOR.—The term 8 ‘‘digital game distributor’’ means a person that, for 9 commercial purposes, in interstate or foreign com- 10 merce, distributes an interactive digital entertain- 11 ment product over an online platform to over 1,000 12 users annually. 13 (4) GAME PUBLISHER.—The term ‘‘game pub- 14 lisher’’ means a person that, for commercial pur- 15 poses, in interstate or foreign commerce, develops or 16 finances the development of an interactive digital en- 17 tertainment product that is distributed to over 1,000 18 users annually. 19 (5) MINOR-ORIENTED GAME.—The term 20 ‘‘minor-oriented video game’’ means an interactive 21 digital entertainment product for which the target 22 audience is individuals under the age of 18, as may 23 be demonstrated by— 24 (A) the subject matter of the product; 25 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 5 •S 1629 IS (B) the visual content of the product; 1 (C) the music or audio content of the prod- 2 uct; 3 (D) the use of animated characters or ac- 4 tivities that appeal to individuals under the age 5 of 18; 6 (E) the age of the characters or models in 7 the product; 8 (F) the presence in the product of— 9 (i) celebrities who are under the age 10 of 18; or 11 (ii) celebrities who appeal to individ- 12 uals under the age of 18; 13 (G) the language used in the product; 14 (H) the content of materials used to adver- 15 tise the product and the platforms on which 16 such materials appear; 17 (I) the content of any advertising materials 18 that appear in the product; 19 (J) other reliable empirical evidence relat- 20 ing to— 21 (i) the composition of the audience of 22 the product; or 23 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 6 •S 1629 IS (ii) the audience of the product, as in- 1 tended by the publisher or distributor of 2 the product; or 3 (K) other evidence demonstrating that the 4 product is targeted at individuals under the age 5 of 18. 6 (6) ADD-ON TRANSACTION.— 7 (A) IN GENERAL.—The term ‘‘add-on 8 transaction’’ means, with respect to an inter- 9 active digital entertainment product, a payment 10 to the game publisher of an interactive digital 11 entertainment product, an affiliate of the pub- 12 lisher, or any other person who accepts such 13 payment for the benefit of the publisher, of ei- 14 ther money or an in-game proxy for money, 15 such as a virtual currency, that can be pur- 16 chased with money, that— 17 (i) unlocks a feature of the product; 18 or 19 (ii) adds to or enhances the entertain- 20 ment value of the product. 21 (B) EXCLUSION.—Such a term shall not 22 include a payment (including a payment of a 23 regular subscription fee) which is made only to 24 allow a user to access the content of an inter- 25 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 7 •S 1629 IS active digital entertainment product, provided 1 that users do not have the option to pay dif- 2 ferent amounts to access the same content in 3 order to unlock a feature of the product or to 4 enhance the entertainment value of the product. 5 (7) PAY-TO-WIN MICROTRANSACTION.— 6 (A) IN GENERAL.—The term ‘‘pay-to-win 7 microtransaction’’ means an add-on transaction 8 to a interactive digital entertainment product 9 that— 10 (i) with respect to an interactive dig- 11 ital entertainment product that, from the 12 perspective of a reasonable user of the 13 product, is a game offering a scoring sys- 14 tem, a set of goals to achieve, a set of re- 15 wards, or a sense of interactive progression 16 through the product’s content including 17 but not limited to narrative progression— 18 (I) eases a user’s progression 19 through content otherwise available 20 within the game without the purchase 21 of such transaction; 22 (II) assists a user in accom- 23 plishing an achievement within the 24 game that can otherwise be accom- 25 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 8 •S 1629 IS plished without the purchase of such 1 transaction; 2 (III) assists a user in receiving 3 an award associated with the game 4 that is otherwise available in associa- 5 tion with the game without the pur- 6 chase of such transaction; or 7 (IV) permits a user to continue 8 to access content of the game that 9 had previously been accessible to the 10 user but has been made inaccessible 11 after the expiration of a timer or a 12 number of gameplay attempts; or 13 (ii) with respect to an interactive dig- 14 ital entertainment product that, from the 15 perspective of a reasonable user of the 16 product, is a game featuring competition 17 with other users, provides a user with a 18 competitive advantage with respect to the 19 game’s competitive aspects over users who 20 do not make such a transaction. 21 (B) EXCLUSIONS.— 22 (i) DIFFICULTY MODES.—Such term 23 shall not include an add-on transaction to 24 an interactive digital entertainment prod- 25 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 9 •S 1629 IS uct that provides the user with access to a 1 new mode of play that makes progression 2 through the content of the product more 3 difficult than it would be without the 4 transaction (as perceived by a reasonable 5 user). 6 (ii) COSMETIC ALTERATIONS.—Such 7 term shall not include an add-on trans- 8 action to an interactive digital entertain- 9 ment product whose only effect is to alter 10 a user’s visual representation within the 11 game provided that it does not, from the 12 perspective of a reasonable user, provide 13 the user with a competitive advantage over 14 other users who do not make such trans- 15 action. 16 (iii) ADDITIONAL GAME CONTENT.— 17 Such term shall not include an add-on 18 transaction to an interactive digital enter- 19 tainment product that adds new content to 20 the product provided that the add-on 21 transaction can be purchased only once by 22 a user and the perceived value offered by 23 such transaction, from the perspective of a 24 reasonable user, is not that it— 25 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 10 •S 1629 IS (I) eases a user’s progression 1 through content otherwise available 2 within the product without the pur- 3 chase of such transaction; 4 (II) assists a user in accom- 5 plishing an achievement within the 6 product that can otherwise be accom- 7 plished without the purchase of such 8 transaction; 9 (III) assists a user in receiving 10 an award associated with the product 11 that is otherwise available in associa- 12 tion with the product without the pur- 13 chase of such transaction; 14 (IV) permits a user to continue 15 to access content of the product that 16 had previously been accessible to the 17 user but is made inaccessible after the 18 expiration of a timer or a number of 19 gameplay attempts; or 20 (V) provides a competitive advan- 21 tage over other users with respect to 22 a product’s competitive aspects. 23 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 11 •S 1629 IS (8) LOOT BOX.—The term ‘‘loot box’’ means an 1 add-on transaction to an interactive digital enter- 2 tainment product that— 3 (A) in a randomized or partially random- 4 ized fashion— 5 (i) unlocks a feature of the product; 6 or 7 (ii) adds to or enhances the entertain- 8 ment value of the product; or 9 (B) allows the user to make 1 or more ad- 10 ditional add-on transactions— 11 (i) that the user could not have made 12 without making the first add-on trans- 13 action; and 14 (ii) the content of which is unknown 15 to the user until after the user has made 16 the first add-on transaction. 17 SEC. 3. ENFORCEMENT AND APPLICABILITY. 18 (a) ENFORCEMENT BY THE COMMISSION.— 19 (1) IN GENERAL.—Except as otherwise pro- 20 vided, this Act shall be enforced by the Commission 21 under the Federal Trade Commission Act (15 22 U.S.C. 41 et seq.). 23 (2) UNFAIR OR DECEPTIVE ACTS OR PRAC- 24 TICES.—A violation of this Act shall be treated as 25 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 12 •S 1629 IS a violation of a rule defining an unfair or deceptive 1 act or practice prescribed under section 18(a)(1)(B) 2 of the Federal Trade Commission Act (15 U.S.C. 3 57a(a)(1)(B)). 4 (3) ACTIONS BY THE COMMISSION.— 5 (A) IN GENERAL.—Except as provided in 6 subsection (c)(1), the Commission shall prevent 7 any person from violating this Act in the same 8 manner, by the same means, and with the same 9 jurisdiction, powers, and duties as though all 10 applicable terms and provisions of the Federal 11 Trade Commission Act (15 U.S.C. 41 et seq.) 12 were incorporated into and made a part of this 13 Act, and any person who violates this Act shall 14 be subject to the penalties and entitled to the 15 privileges and immunities provided in the Fed- 16 eral Trade Commission Act. 17 (B) VIOLATIONS.— 18 (i) IN GENERAL.—In an action 19 brought by the Commission to enforce this 20 Act, each pay-to-win microtransaction or 21 loot box sold to a user who is under the 22 age of 18 through an interactive digital en- 23 tertainment product that does not meet a 24 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1629.IS S1629 kjohnson on DSK79L0C42 with BILLS 13 •S 1629 IS requirement of this Act shall be treated as 1 a separate violation. 2 (ii) CIVIL PENALTY.—Notwith- 3 standing section 5(m) of the Federal Trade 4 Commission Act (15 U.S.C. 45(m)), a civil 5 penalty recovered for a violation of this Act 6 may be in excess of the amounts provided 7 for in that section as the court finds ap- 8 propriate to deter violations of this Act. 9 (iii) FIRST VIOLATIONS.—In an action 10 brought by the Commission to enforce this 11 Act, the Commission may seek a civil pen- 12 alty for any violation of this Act, including 13 any violation that is the first violation of 14 this Act that a person against whom the 15 action is brought has committed. 16 (b) ENFORCEMENT BY STATE ATTORNEYS GEN- 17 ERAL.— 18 (1) IN GENERAL.— 19 (A) CIVIL ACTIONS.—In any case in which 20 the attorney general of a State has reason to 21 believe that an interest of the residents of that 22 State has been or is threatened or adversely af- 23 fected by the engagement of any person in a 24 practice that violates this Act, the State, as 25 VerDate Sep 11 2014 23:01 Jun 03, 2019 Jkt 089200 PO 00000 Frm 00013 Fmt 6652 Sf [Text truncated for display. Full text available on Congress.gov.]