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S.L.C.

S. ll

116TH CONGRESS
1ST SESSION

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
llllllllll
Mr. HAWLEY (for himself, Mr. BLUMENTHAL, and Mr. MARKEY) introduced
the following bill; which was read twice and referred to the Committee
on llllllllll

A BILLTo regulate certain pay-to-win microtransactions and salesof loot boxes in interactive digital entertainment products, and for other purposes.
1Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3SECTION 1. REGULATION OF PAY-TO-WIN MICROTRANS-

4ACTIONS AND SALES OF LOOT BOXES IN

5VIDEO GAMES.

6(a) PROHIBITION

7ACTIONS AND

8ENTED GAMES.—OF

PAY-TO-WIN MICROTRANS-SALES OF LOOT BOXES IN MINOR-ORI-LYN19247

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21234(1) GAME PUBLISHERS.—It is unlawful for agame publisher to publish—(A) a minor-oriented game that includes
pay-to-win microtransactions or loot boxes; or5(B) an update to an existing minor-ori-

6

ented game that would enable pay-to-win micro-

7transactions or loot boxes in such game.

8(2) DIGITAL GAME DISTRIBUTORS.—It is un-

9

lawful for a digital game distributor to distribute—

10(A) a minor-oriented game that includes

11

pay-to-win microtransactions or loot boxes; or12(B) an update to an existing minor-ori-

13

ented game that would enable pay-to-win micro-

14transactions or loot boxes in such game.

15(b) PROHIBITION ON PUBLICATION OR DISTRIBU-

16

TION OF VIDEO GAMES CONTAINING PAY-TO-WIN MICRO-

17TRANSACTIONS OR

18THE PUBLISHER OR DISTRIBUTOR HAS CONSTRUCTIVE

PURCHASING LOOT BOXES WHERE

19 KNOWLEDGE THAT ANY USERS ARE UNDER AGE 18.—
20(1) GAME PUBLISHERS.—It is unlawful for a

21

game publisher to publish an interactive digital en-

22

tertainment product that is not a minor-oriented

23

game (or an update to such a product) if—

2425(A) such product or update contains payto-win microtransactions or loot boxes; andLYN19247

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31(B) the publisher has constructive knowl-2edge that any of its users are under the age of318.

4(2) DIGITAL GAME DISTRIBUTORS.—It is un-

5

lawful for a digital game distributor to distribute an

6interactive digital entertainment product that is not

7a minor-oriented game (or an update to such a prod-8uct) if—910(A) such product or update contains payto-win microtransactions or loot boxes; and11(B) the distributor has constructive knowl-

12edge that any of its users are under the age of

13

18.

14SEC. 2. DEFINITIONS.

15

In this Act:

16171819(1) COMMISSION.—The term ‘‘Commission’’means the Federal Trade Commission.
(2) INTERACTIVE

DIGITAL

ENTERTAINMENTPRODUCT.—

20(A) IN GENERAL.—The term ‘‘interactive

21

digital entertainment product’’ means a pro-

22

gram such as a video game that is accessed by23

a connected device and provides an interactive

24

entertainment experience for the user.

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4
1
2(B) EXCLUSION.—Such term shall not include a program if—

3(i) a user’s interaction with the pro-

4

gram is limited to selecting options from a5

menu of choices; and6(ii) the program would not be consid-7ered a game by a reasonable user.

8(3) DIGITAL GAME DISTRIBUTOR.—The term

9‘‘digital game distributor’’ means a person that, for10commercial purposes, in interstate or foreign com-

11merce, distributes an interactive digital entertain-

12

ment product over an online platform to over 1,000

13users annually.

14(4) GAME PUBLISHER.—The term ‘‘game pub-

15lisher’’ means a person that, for commercial pur-16poses, in interstate or foreign commerce, develops or

17

finances the development of an interactive digital en-18tertainment product that is distributed to over 1,000

19users annually.

20(5)MINOR-ORIENTED

GAME.—Theterm

21‘‘minor-oriented video game’’ means an interactive

22

digital entertainment product for which the target

23

audience is individuals under the age of 18, as may

24

be demonstrated by—

25(A) the subject matter of the product;LYN19247

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51(B) the visual content of the product;

2(C) the music or audio content of the prod-

3uct;

4(D) the use of animated characters or ac-

5

tivities that appeal to individuals under the age

6of 18;789(E) the age of the characters or models inthe product;(F) the presence in the product of—1011(i) celebrities who are under the ageof 18; or

12(ii) celebrities who appeal to individ-

13uals under the age of 18;

14(G) the language used in the product;

15(H) the content of materials used to adver-16

tise the product and the platforms on which

17such materials appear;18
1920212223(I) the content of any advertising materials
that appear in the product;(J) other reliable empirical evidence relating to—(i) the composition of the audience ofthe product; orLYN19247

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61(ii) the audience of the product, as in-2

tended by the publisher or distributor of

3the product; or4(K) other evidence demonstrating that the5product is targeted at individuals under the age

6of 18.

7(6) ADD-ON TRANSACTION.—

8(A) INGENERAL.—Theterm ‘‘add-on

9transaction’’ means, with respect to an inter-

10

active digital entertainment product, a payment

11to the game publisher of an interactive digital

12

entertainment product, an affiliate of the pub-

13lisher, or any other person who accepts such

14payment for the benefit of the publisher, of ei-

15

ther money or an in-game proxy for money,

16

such as a virtual currency, that can be pur-17

chased with money, that—181920(i) unlocks a feature of the product;or(ii) adds to or enhances the entertain-

21

ment value of the product.

22(B) EXCLUSION.—Such a term shall not

23

include a payment (including a payment of a24

regular subscription fee) which is made only to25

allow a user to access the content of an inter-LYN19247

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71

active digital entertainment product, provided2that users do not have the option to pay dif-3

ferent amounts to access the same content in

4order to unlock a feature of the product or to5enhance the entertainment value of the product.

6(7) PAY-TO-WIN MICROTRANSACTION.—

7(A) IN GENERAL.—The term ‘‘pay-to-win

8

microtransaction’’ means an add-on transaction

9

to a interactive digital entertainment product

10

that—

11(i) with respect to an interactive dig-12

ital entertainment product that, from the13perspective of a reasonable user of the14product, is a game offering a scoring sys-15

tem, a set of goals to achieve, a set of re-16

wards, or a sense of interactive progression

17

through the product’s content including

18

but not limited to narrative progression—

19(I) eases a user’s progression

20

through content otherwise available

21

within the game without the purchase22of such transaction;

23(II) assists a user in accom-

24

plishing an achievement within the25

game that can otherwise be accom-

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8
1plished without the purchase of such2transaction;3(III) assists a user in receiving

4

an award associated with the game

5

that is otherwise available in associa-

6tion with the game without the pur-7

chase of such transaction; or8(IV) permits a user to continue

9

to access content of the game that10

had previously been accessible to the11user but has been made inaccessible

12

after the expiration of a timer or a13

number of gameplay attempts; or

14(ii) with respect to an interactive dig-15

ital entertainment product that, from the16perspective of a reasonable user of the17product, is a game featuring competition

18

with other users, provides a user with a19

competitive advantage with respect to the20

game’s competitive aspects over users who

21

do not make such a transaction.

22(B) EXCLUSIONS.—

23(i) DIFFICULTY MODES.—Such term

24

shall not include an add-on transaction to25

an interactive digital entertainment prod-LYN19247

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91

uct that provides the user with access to a2

new mode of play that makes progression

3

through the content of the product more

4

difficult than it would be without the5transaction (as perceived by a reasonable

6user).

7(ii) COSMETICALTERATIONS.—Such8term shall not include an add-on trans-9action to an interactive digital entertain-

10

ment product whose only effect is to alter

11

a user’s visual representation within the12game provided that it does not, from the13perspective of a reasonable user, provide

14

the user with a competitive advantage over15

other users who do not make such trans-

16action.

17(iii) ADDITIONAL GAME CONTENT.—

18

Such term shall not include an add-on

19transaction to an interactive digital enter-20

tainment product that adds new content to21

the product provided that the add-on

22transaction can be purchased only once by23

a user and the perceived value offered by24such transaction, from the perspective of a25

reasonable user, is not that it—LYN19247

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10
1(I) eases a user’s progression

2

through content otherwise available

3

within the product without the pur-4chase of such transaction;5(II) assists a user in accom-

6

plishing an achievement within the7product that can otherwise be accom-

8

plished without the purchase of such

9transaction;10(III) assists a user in receiving

11

an award associated with the product

12

that is otherwise available in associa-

13tion with the product without the pur-14chase of such transaction;

15(IV) permits a user to continue

16

to access content of the product that17

had previously been accessible to the18

user but is made inaccessible after the19

expiration of a timer or a number of20

gameplay attempts; or21(V) provides a competitive advan-

22

tage over other users with respect to23

a product’s competitive aspects.

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111(8) LOOT BOX.—The term ‘‘loot box’’ means an2

add-on transaction to an interactive digital enter-3

tainment product that—

45(A) in a randomized or partially randomized fashion—

678(i) unlocks a feature of the product;or(ii) adds to or enhances the entertain-

9ment value of the product; or10(B) allows the user to make 1 or more ad-

11ditional add-on transactions—

12(i) that the user could not have made13

without making the first add-on trans-

14

action; and15(ii) the content of which is unknown

16

to the user until after the user has made17

the first add-on transaction.

18

SEC. 3. ENFORCEMENT AND APPLICABILITY.

19(a) ENFORCEMENT BY THE COMMISSION.—

20(1) IN GENERAL.—Except as otherwise pro-21vided, this Act shall be enforced by the Commission

22

under the Federal Trade Commission Act (1523U.S.C. 41 et seq.).

24(2) UNFAIR OR DECEPTIVE ACTS OR PRAC-

25TICES.—A violation of this Act shall be treated as

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12
1a violation of a rule defining an unfair or deceptive

2act or practice prescribed under section 18(a)(1)(B)

3of the Federal Trade Commission Act (15 U.S.C.

457a(a)(1)(B)).

5(3) ACTIONS BY THE COMMISSION.—

6(A) IN GENERAL.—Except as provided in

7

subsection (c)(1), the Commission shall prevent8

any person from violating this Act in the same9

manner, by the same means, and with the same10

jurisdiction, powers, and duties as though all

11

applicable terms and provisions of the Federal

12

Trade Commission Act (15 U.S.C. 41 et seq.)

13

were incorporated into and made a part of this

14

Act, and any person who violates this Act shall15

be subject to the penalties and entitled to the16privileges and immunities provided in the Fed-17

eral Trade Commission Act.

18(B) VIOLATIONS.—

19(i)

IN

GENERAL.—Inanaction

20

brought by the Commission to enforce this21Act, each pay-to-win microtransaction or

22loot box sold to a user who is under the23

age of 18 through an interactive digital en-24

tertainment product that does not meet aLYN19247

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131

requirement of this Act shall be treated as2

a separate violation.

3(ii)

CIVIL

PENALTY.—Notwith-4

standing section 5(m) of the Federal Trade

5

Commission Act (15 U.S.C. 45(m)), a civil

6

penalty recovered for a violation of this Act7may be in excess of the amounts provided

8for in that section as the court finds ap-

9propriate to deter violations of this Act.

10(iii) FIRST VIOLATIONS.—In an action

11

brought by the Commission to enforce this

12Act, the Commission may seek a civil pen-

13

alty for any violation of this Act, including

14

any violation that is the first violation of15

this Act that a person against whom the16action is brought has committed.

17(b) ENFORCEMENT BY STATE ATTORNEYS GEN-

1819ERAL.—(1) IN GENERAL.—

20(A) CIVIL ACTIONS.—In any case in which

21

the attorney general of a State has reason to22

believe that an interest of the residents of that23

State has been or is threatened or adversely af-24

fected by the engagement of any person in a25practice that violates this Act, the State, as

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141

parens patriae, may bring a civil action on be-2

half of the residents of the State in an appro-3

priate State court to—4(i) enjoin that practice;5(ii) enforce compliance with this Act;

6(iii) obtain damages, restitution, or7other compensation on behalf of residents

8of the State; or9(iv) obtain such other relief as the10court may consider to be appropriate.

11(B) NOTICE.—

12(i) IN GENERAL.—Before filing an ac-

13tion under subparagraph (A), the attorney

14general of the State involved shall provide

15

to the Commission—

16
17
18(I) written notice of that action;and(II) a copy of the complaint for

19

that action.

20(ii) EXEMPTION.—

21(I)INGENERAL.—Clause(i)22shall not apply with respect to the fil-23

ing of an action by an attorney gen-24

eral of a State under this paragraph25

if the attorney general of the StateLYN19247

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15
1

determines that it is not feasible to2provide the notice described in that3

clause before the filing of the action.

4(II) NOTIFICATION.—In an ac-

5tion described in subclause (I), the at-6torney general of a State shall provide

7

notice and a copy of the complaint to8

the Commission at the same time as

9

the attorney general files the action.

10
11(2) INTERVENTION.—(A) INGENERAL.—Onreceiving notice

12

under paragraph (1)(B), the Commission shall13

have the right to intervene in the action that is14

the subject of the notice.

15(B) EFFECT OF INTERVENTION.—If the16Commission intervenes in an action under para-

17graph (1), it shall have the right—

18(i) to be heard with respect to any

19matter that arises in that action; and20(ii) to file a petition for appeal.

21(3) CONSTRUCTION.—For purposes of bringing

22

any civil action under paragraph (1), nothing in this23

Act shall be construed to prevent an attorney gen-24

eral of a State from exercising the powers conferredLYN19247

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16
1on the attorney general by the laws of that State

2to—3(A) conduct investigations;

4(B) administer oaths or affirmations; or5(C) compel the attendance of witnesses or6

the production of documentary and other evi-

7dence.

8(4) ACTIONSBY THE COMMISSION.—Inany

9case in which an action is instituted by or on behalf

10of the Commission for violation of this Act, no State

11may, during the pendency of that action, institute an12action under paragraph (1) against any defendant13

named in the complaint in the action instituted by

14or on behalf of the Commission for that violation.

15(5) VENUE; SERVICE OF PROCESS.—

16(A) VENUE.—Any action brought under

17paragraph (1) may be brought in any State18

court of competent jurisdiction.

19(B) SERVICE OF PROCESS.—In an action

20

brought under paragraph (1), process may be

21

served wherever the defendant—

22(i) is an inhabitant; or23(ii) may be found.

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1712SEC. 4. STUDY OF COMPLIANCE.

Not later than 2 years after the date of enactment

3 of this Act, the Commission shall submit to each com4 mittee of Congress with jurisdiction over the Commission
5 a report on—6(1) the actions taken by game publishers and7

digital game distributors to comply with this Act;

8and910(2) other Federal or State laws relating to payto-win microtransactions and loot boxes.

11SEC. 5. STUDY OF THE EFFECT OF PAY-TO-WIN MICRO-

12TRANSACTIONS AND LOOT BOXES.

13(a) IN GENERAL.—Not later than 2 years after the14 date of enactment of this Act, the Commission shall sub15 mit to each committee of Congress with jurisdiction over16 the Commission a report on the use of add-on content,
17 including pay-to-win microtransactions, loot boxes, and18 other kinds of add-on transactions in the design of inter19 active digital entertainment products for audiences of all
20 ages.
21(b) CONTENTOFREPORT.—The report required

22 under subsection (a) shall—
23(1) analyze the use of pay-to-win microtrans-

24

action and loot box design practices in specific inter-

25

active digital entertainment products;

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1812(2) analyze the psychological effects of pay-towin microtransactions and loot boxes on users;

3(3) study game development practices relating4

to pay-to-win microtransactions and loot boxes, in-5cluding A/B testing of various pay-to-win micro-

6transaction or loot box designs;

7(4) analyze the effects of pay-to-win microtrans-

8

actions and loot boxes on investment and production

9in the digital entertainment industry;

10(5) document different types of pay-to-win

11

microtransactions and loot boxes found in interactive

12

digital entertainment products; and13(6) analyze whether other forms of add-on

14transactions to interactive digital entertainment

15products, such as those altering a user’s visual rep-16

resentation within a product, can induce compulsive

17

purchasing behavior by minors.

18(c) USE OF PSYCHOLOGICAL RESEARCH.—The Com-

19 mission may conduct or commission psychological research
20 on users of interactive digital entertainment products to21 inform the report required under subsection (a).