It looks like Electronic Arts just had a class action lawsuit filed against them in Canada over their use of loot boxes. While the lawsuit was filed on September 30, 2020, as far as I can tell there’s been no media coverage whatsoever about it, which seems a little bit crazy to me [Edit: It now has. I kind of feel like I broke a news story. Exciting times.]. I only learned about it because a colleague of mine found it in Business in Vancouver’s “Who’s Getting Sued” feature – which basically looks at the court registry for a list of filings.
In any event, I had a look at the Notice of Civil Claim (essentially the document that starts the lawsuit) so I thought I’d put this short little summary of what’s going on for anyone who’s interested.
What’s this all about?
Sparing you the legalese, the TL:DR summary of the plaintiffs’ case is this: loot boxes constitute gambling, and are prohibited by the gambling provisions of the Criminal Code and various other statutes.
By offering loot boxes through its games, the plaintiffs are essentially claiming that EA is operating an unlicensed gambling business, in breach of the aforementioned Criminal Code and other statutes. They are also claiming EA is liable to them at common law, including in unjust enrichment.
The plaintiffs are also alleging the way in which EA has implemented loot boxes, including not publishing the odds of winning prizes, and making using them semi-necessary for progression, breached various consumer protection statutes, including the BC Consumer Protection Act.
This is a class action, so this means that the plaintiffs (who are two individuals, one based in BC, the other in Ontario) are suing not only on their own behalf, but on behalf of everyone else in Canada who bought any loot boxes in any games published by EA since 2008.
What games are covered by the lawsuit?
Pretty much every game EA has published that involves loot boxes since 2008, including the Madden, FIFA, NHL, NBA Live (RIP), Mass Effect, Need for Speed, Plants vs Zombies and Battlefield series, as well as Apex Legends. So if you bought a loot box in any of these games since 2008, you are possibly covered by the suit.
Oddly, while the Notice of Civil Claim lists around 60 titles, including multiple other Star Wars games, Star Wars: Battlefront, the game that started this whole mess and reason we’re all here, isn’t explicitly listed. Not sure if that’s just an oversight.
Is this lawsuit legit or just something put together by some crank?
It’s legit. The plaintiffs are represented by a well-respected firm in BC, as well one of BC’s most prominent class action solo practitioners (Who I actually went to high school with. Hi Matt!). This is not a self-represented litigant filing a nuisance lawsuit, but a well-pled claim brought by an experienced legal team who specializes in going after large corporations for stuff like this.
Is EA facing criminal liability?
No. This is purely a civil suit between private parties. Only the government can bring charges over breaches of the Criminal Code and it hasn’t done that. The worst EA can expect directly out of this suit is having to pay a lot of money in damages.
However, even though this is a civil suit, the issue of whether loot boxes breach the gambling provisions of the Criminal Code will be relevant in the proceeding, and if the court makes findings against EA in that regard, that may increase pressure on the government to respond, either by regulating loot boxes or taking some other action against EA (and the rest of the industry).
How much could EA have to pay in damages?
That’s a whole other blog post in itself, but the short version is…a lot. In their unjust enrichment claim, the plaintiffs are seeking essentially everything EA made through selling loot boxes since 2008. Similarly, the claims under consumer protection legislation allow the plaintiffs to potentially undo all the loot box contracts at issue and get back everything they paid.
If all the claims succeed as pled, then in theory EA could be forced to pay back everything it’s made off loot boxes since 2008. That’s a pretty gigantic “if” of course, so please take this with a grain of salt.
So what happens now?
The Notice of Civil Claim was filed on September 30, 2020. Under the rules of court EA has 3 weeks from then to file its response from when it was served. That should come out later this week, and I will post about it on here when it does. After that, nothing more will likely be filed or come out publicly for at least a few months.
One big step in class actions like these is the class certification hearing, in which the court determines whether a case can proceed as a class action or not. That likely won’t be until many months down the line (assuming the case doesn’t settle before then), but it will be a public hearing and may see some media coverage.
Realistically, though, as with all legal cases, this could drag on for years and years before a trial occurs, and most likely will settle before then.
What does this mean for me if I bought loot boxes from EA?
Nothing for now. If the case settles with some kind of payment going to all the class members (a long, long time from now), you will likely get some kind of notice through the contact info associated with the EA account you used to buy the loot boxes at issue letting you know of your options. There may also be ways to opt out/into the class and notices surrounding that. For now, however, there’s not much to do but wait.
Who’s going to win?
I have no idea, of course.
One potential stumbling block I see for the plaintiffs, though, is that many of the formulations of the legal test for whether something constitutes unlawful gambling require that the prize that can be won has to have some monetary value. Here, EA can argue that the in-game benefits obtained through loot boxes have no real cash value, therefore loot boxes don’t constitute gambling. How that will play out remains to be seen.