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

Summary:
This bill prohibits the publication or distribution of interactive video games and digital entertainment products that (1) include pay-to-win features and (2) are targeted to minors under the age of 18.
Pay-to-win features include making available for purchase assistance, advantages, or other awards that a reasonable user would perceive provides a competitive advantage in the progression of the game or product over those users who do not make such purchase. Pay-to-play features do not include purchases (1) that alter only the appearance of the game, (2) of game modes that make game-play progression more difficult that without such purchase, or (3) of add-ons that do not assist in the progression of the underlying game or product.  Additionally, game publishers and distributors are prohibited from including pay-to-play features in games and digital entertainment products that are not targeted to minors but where the publisher or distributor reasonably should know that minors use such games or products.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1629 Introduced in Senate (IS)]

<DOC>






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 products, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REGULATION OF PAY-TO-WIN MICROTRANSACTIONS AND SALES OF LOOT 
              BOXES IN VIDEO GAMES.

    (a) Prohibition of Pay-to-Win Microtransactions and Sales of Loot 
Boxes in Minor-Oriented Games.--
            (1) Game publishers.--It is unlawful for a game publisher 
        to publish--
                    (A) a minor-oriented game that includes pay-to-win 
                microtransactions or loot boxes; or
                    (B) an update to an existing minor-oriented game 
                that would enable pay-to-win microtransactions or loot 
                boxes in such game.
            (2) Digital game distributors.--It is unlawful for a 
        digital game distributor to distribute--
                    (A) a minor-oriented game that includes pay-to-win 
                microtransactions or loot boxes; or
                    (B) an update to an existing minor-oriented game 
                that would enable pay-to-win microtransactions or loot 
                boxes in such game.
    (b) Prohibition on Publication or Distribution of Video Games 
Containing Pay-to-Win Microtransactions or Purchasing Loot Boxes Where 
the Publisher or Distributor Has Constructive Knowledge That Any Users 
Are Under Age 18.--
            (1) Game publishers.--It is unlawful for a game publisher 
        to publish an interactive digital entertainment product that is 
        not a minor-oriented game (or an update to such a product) if--
                    (A) such product or update contains pay-to-win 
                microtransactions or loot boxes; and
                    (B) the publisher has constructive knowledge that 
                any of its users are under the age of 18.
            (2) Digital game distributors.--It is unlawful for a 
        digital game distributor to distribute an interactive digital 
        entertainment product that is not a minor-oriented game (or an 
        update to such a product) if--
                    (A) such product or update contains pay-to-win 
                microtransactions or loot boxes; and
                    (B) the distributor has constructive knowledge that 
                any of its users are under the age of 18.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Interactive digital entertainment product.--
                    (A) In general.--The term ``interactive digital 
                entertainment product'' means a program such as a video 
                game that is accessed by a connected device and 
                provides an interactive entertainment experience for 
                the user.
                    (B) Exclusion.--Such term shall not include a 
                program if--
                            (i) a user's interaction with the program 
                        is limited to selecting options from a menu of 
                        choices; and
                            (ii) the program would not be considered a 
                        game by a reasonable user.
            (3) Digital game distributor.--The term ``digital game 
        distributor'' means a person that, for commercial purposes, in 
        interstate or foreign commerce, distributes an interactive 
        digital entertainment product over an online platform to over 
        1,000 users annually.
            (4) Game publisher.--The term ``game publisher'' means a 
        person that, for commercial purposes, in interstate or foreign 
        commerce, develops or finances the development of an 
        interactive digital entertainment product that is distributed 
        to over 1,000 users annually.
            (5) Minor-oriented game.--The term ``minor-oriented video 
        game'' means an interactive digital entertainment product for 
        which the target audience is individuals under the age of 18, 
        as may be demonstrated by--
                    (A) the subject matter of the product;
                    (B) the visual content of the product;
                    (C) the music or audio content of the product;
                    (D) the use of animated characters or activities 
                that appeal to individuals under the age of 18;
                    (E) the age of the characters or models in the 
                product;
                    (F) the presence in the product of--
                            (i) celebrities who are under the age of 
                        18; or
                            (ii) celebrities who appeal to individuals 
                        under the age of 18;
                    (G) the language used in the product;
                    (H) the content of materials used to advertise the 
                product and the platforms on which such materials 
                appear;
                    (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 of the 
                        product; or
                            (ii) the audience of the product, as 
                        intended by the publisher or distributor of the 
                        product; or
                    (K) other evidence demonstrating that the product 
                is targeted at individuals under the age of 18.
            (6) Add-on transaction.--
                    (A) In general.--The term ``add-on transaction'' 
                means, with respect to an interactive digital 
                entertainment product, a payment to the game publisher 
                of an interactive digital entertainment product, an 
                affiliate of the publisher, or any other person who 
                accepts such payment for the benefit of the publisher, 
                of either money or an in-game proxy for money, such as 
                a virtual currency, that can be purchased with money, 
                that--
                            (i) unlocks a feature of the product; or
                            (ii) adds to or enhances the entertainment 
                        value of the product.
                    (B) Exclusion.--Such a term shall not include a 
                payment (including a payment of a regular subscription 
                fee) which is made only to allow a user to access the 
                content of an interactive digital entertainment 
                product, provided that users do not have the option to 
                pay different amounts to access the same content in 
                order to unlock a feature of the product or to enhance 
                the entertainment value of the product.
            (7) Pay-to-win microtransaction.--
                    (A) In general.--The term ``pay-to-win 
                microtransaction'' means an add-on transaction to a 
                interactive digital entertainment product that--
                            (i) with respect to an interactive digital 
                        entertainment product that, from the 
                        perspective of a reasonable user of the 
                        product, is a game offering a scoring system, a 
                        set of goals to achieve, a set of rewards, or a 
                        sense of interactive progression through the 
                        product's content including but not limited to 
                        narrative progression--
                                    (I) eases a user's progression 
                                through content otherwise available 
                                within the game without the purchase of 
                                such transaction;
                                    (II) assists a user in 
                                accomplishing an achievement within the 
                                game that can otherwise be accomplished 
                                without the purchase of such 
                                transaction;
                                    (III) assists a user in receiving 
                                an award associated with the game that 
                                is otherwise available in association 
                                with the game without the purchase of 
                                such transaction; or
                                    (IV) permits a user to continue to 
                                access content of the game that had 
                                previously been accessible to the user 
                                but has been made inaccessible after 
                                the expiration of a timer or a number 
                                of gameplay attempts; or
                            (ii) with respect to an interactive digital 
                        entertainment product that, from the 
                        perspective of a reasonable user of the 
                        product, is a game featuring competition with 
                        other users, provides a user with a competitive 
                        advantage with respect to the game's 
                        competitive aspects over users who do not make 
                        such a transaction.
                    (B) Exclusions.--
                            (i) Difficulty modes.--Such term shall not 
                        include an add-on transaction to an interactive 
                        digital entertainment product that provides the 
                        user with access to a new mode of play that 
                        makes progression through the content of the 
                        product more difficult than it would be without 
                        the transaction (as perceived by a reasonable 
                        user).
                            (ii) Cosmetic alterations.--Such term shall 
                        not include an add-on transaction to an 
                        interactive digital entertainment product whose 
                        only effect is to alter a user's visual 
                        representation within the game provided that it 
                        does not, from the perspective of a reasonable 
                        user, provide the user with a competitive 
                        advantage over other users who do not make such 
                        transaction.
                            (iii) Additional game content.--Such term 
                        shall not include an add-on transaction to an 
                        interactive digital entertainment product that 
                        adds new content to the product provided that 
                        the add-on transaction can be purchased only 
                        once by a user and the perceived value offered 
                        by such transaction, from the perspective of a 
                        reasonable user, is not that it--
                                    (I) eases a user's progression 
                                through content otherwise available 
                                within the product without the purchase 
                                of such transaction;
                                    (II) assists a user in 
                                accomplishing an achievement within the 
                                product that can otherwise be 
                                accomplished without the purchase of 
                                such transaction;
                                    (III) assists a user in receiving 
                                an award associated with the product 
                                that is otherwise available in 
                                association with the product without 
                                the purchase of such transaction;
                                    (IV) permits a user to continue to 
                                access content of the product that had 
                                previously been accessible to the user 
                                but is made inaccessible after the 
                                expiration of a timer or a number of 
                                gameplay attempts; or
                                    (V) provides a competitive 
                                advantage over other users with respect 
                                to a product's competitive aspects.
            (8) Loot box.--The term ``loot box'' means an add-on 
        transaction to an interactive digital entertainment product 
        that--
                    (A) in a randomized or partially randomized 
                fashion--
                            (i) unlocks a feature of the product; or
                            (ii) adds to or enhances the entertainment 
                        value of the product; or
                    (B) allows the user to make 1 or more additional 
                add-on transactions--
                            (i) that the user could not have made 
                        without making the first add-on transaction; 
                        and
                            (ii) the content of which is unknown to the 
                        user until after the user has made the first 
                        add-on transaction.

SEC. 3. ENFORCEMENT AND APPLICABILITY.

    (a) Enforcement by the Commission.--
            (1) In general.--Except as otherwise provided, this Act 
        shall be enforced by the Commission under the Federal Trade 
        Commission Act (15 U.S.C. 41 et seq.).
            (2) Unfair or deceptive acts or practices.--A violation of 
        this Act shall be treated as a violation of a rule defining an 
        unfair or deceptive act or practice prescribed under section 
        18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
        57a(a)(1)(B)).
            (3) Actions by the commission.--
                    (A) In general.--Except as provided in subsection 
                (c)(1), the Commission shall prevent any person from 
                violating this Act in the same manner, by the same 
                means, and with the same jurisdiction, powers, and 
                duties as though all applicable terms and provisions of 
                the Federal Trade Commission Act (15 U.S.C. 41 et seq.) 
                were incorporated into and made a part of this Act, and 
                any person who violates this Act shall be subject to 
                the penalties and entitled to the privileges and 
                immunities provided in the Federal Trade Commission 
                Act.
                    (B) Violations.--
                            (i) In general.--In an action brought by 
                        the Commission to enforce this Act, each pay-
                        to-win microtransaction or loot box sold to a 
                        user who is under the age of 18 through an 
                        interactive digital entertainment product that 
                        does not meet a requirement of this Act shall 
                        be treated as a separate violation.
                            (ii) Civil penalty.--Notwithstanding 
                        section 5(m) of the Federal Trade Commission 
                        Act (15 U.S.C. 45(m)), a civil penalty 
                        recovered for a violation of this Act may be in 
                        excess of the amounts provided for in that 
                        section as the court finds appropriate to deter 
                        violations of this Act.
                            (iii) First violations.--In an action 
                        brought by the Commission to enforce this Act, 
                        the Commission may seek a civil penalty for any 
                        violation of this Act, including any violation 
                        that is the first violation of this Act that a 
                        person against whom the action is brought has 
                        committed.
    (b) Enforcement by State Attorneys General.--
            (1) In general.--
                    (A) Civil actions.--In any case in which the 
                attorney general of a State has reason to believe that 
                an interest of the residents of that State has been or 
                is threatened or adversely affected by the engagement 
                of any person in a practice that violates this Act, the 
                State, as parens patriae, may bring a civil action on 
                behalf of the residents of the State in an appropriate 
                State court to--
                            (i) enjoin that practice;
                            (ii) enforce compliance with this Act;
                            (iii) obtain damages, restitution, or other 
                        compensation on behalf of residents of the 
                        State; or
                            (iv) obtain such other relief as the court 
                        may consider to be appropriate.
                    (B) Notice.--
                            (i) In general.--Before filing an action 
                        under subparagraph (A), the attorney general of 
                        the State involved shall provide to the 
                        Commission--
                                    (I) written notice of that action; 
                                and
                                    (II) a copy of the complaint for 
                                that action.
                            (ii) Exemption.--
                                    (I) In general.--Clause (i) shall 
                                not apply with respect to the filing of 
                                an action by an attorney general of a 
                                State under this paragraph if the 
                                attorney general of the State 
                                determines that it is not feasible to 
                                provide the notice described in that 
                                clause before the filing of the action.
                                    (II) Notification.--In an action 
                                described in subclause (I), the 
                                attorney general of a State shall 
                                provide notice and a copy of the 
                                complaint to the Commission at the same 
                                time as the attorney general files the 
                                action.
            (2) Intervention.--
                    (A) In general.--On receiving notice under 
                paragraph (1)(B), the Commission shall have the right 
                to intervene in the action that is the subject of the 
                notice.
                    (B) Effect of intervention.--If the Commission 
                intervenes in an action under paragraph (1), it shall 
                have the right--
                            (i) to be heard with respect to any matter 
                        that arises in that action; and
                            (ii) to file a petition for appeal.
            (3) Construction.--For purposes of bringing any civil 
        action under paragraph (1), nothing in this Act shall be 
        construed to prevent an attorney general of a State from 
        exercising the powers conferred on the attorney general by the 
        laws of that State to--
                    (A) conduct investigations;
                    (B) administer oaths or affirmations; or
                    (C) compel the attendance of witnesses or the 
                production of documentary and other evidence.
            (4) Actions by the commission.--In any case in which an 
        action is instituted by or on behalf of the Commission for 
        violation of this Act, no State may, during the pendency of 
        that action, institute an action under paragraph (1) against 
        any defendant named in the complaint in the action instituted 
        by or on behalf of the Commission for that violation.
            (5) Venue; service of process.--
                    (A) Venue.--Any action brought under paragraph (1) 
                may be brought in any State court of competent 
                jurisdiction.
                    (B) Service of process.--In an action brought under 
                paragraph (1), process may be served wherever the 
                defendant--
                            (i) is an inhabitant; or
                            (ii) may be found.

SEC. 4. STUDY OF COMPLIANCE.

    Not later than 2 years after the date of enactment of this Act, the 
Commission shall submit to each committee of Congress with jurisdiction 
over the Commission a report on--
            (1) the actions taken by game publishers and digital game 
        distributors to comply with this Act; and
            (2) other Federal or State laws relating to pay-to-win 
        microtransactions and loot boxes.

SEC. 5. STUDY OF THE EFFECT OF PAY-TO-WIN MICROTRANSACTIONS AND LOOT 
              BOXES.

    (a) In General.--Not later than 2 years after the date of enactment 
of this Act, the Commission shall submit to each committee of Congress 
with jurisdiction over the Commission a report on the use of add-on 
content, including pay-to-win microtransactions, loot boxes, and other 
kinds of add-on transactions in the design of interactive digital 
entertainment products for audiences of all ages.
    (b) Content of Report.--The report required under subsection (a) 
shall--
            (1) analyze the use of pay-to-win microtransaction and loot 
        box design practices in specific interactive digital 
        entertainment products;
            (2) analyze the psychological effects of pay-to-win 
        microtransactions and loot boxes on users;
            (3) study game development practices relating to pay-to-win 
        microtransactions and loot boxes, including A/B testing of 
        various pay-to-win microtransaction or loot box designs;
            (4) analyze the effects of pay-to-win microtransactions and 
        loot boxes on investment and production in the digital 
        entertainment industry;
            (5) document different types of pay-to-win 
        microtransactions and loot boxes found in interactive digital 
        entertainment products; and
            (6) analyze whether other forms of add-on transactions to 
        interactive digital entertainment products, such as those 
        altering a user's visual representation within a product, can 
        induce compulsive purchasing behavior by minors.
    (c) Use of Psychological Research.--The Commission may conduct or 
commission psychological research on users of interactive digital 
entertainment products to inform the report required under subsection 
(a).
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