Brazilian authorities to investigate loot boxes

It seems like yet another country is taking a close look at how loot boxes fit with current law, as Brazilian authorities have accepted a request to investigate and potentially ban the controversial microtransactions.

The inquiry comes in response to a recommendation by the National Association of Child and Adolescent Defense Centers (ANCED), which has filed several lawsuits against game companies over their use of loot boxes. ANCED argues that loot boxes are a harmful form of gambling - a banned activity in Brazil (via The Esports Observer).

Brazilian website The Enemy had access to the legal process involving publisher Garena (known for mobile battle royale game Free Fire), and reported that companies including Activision, Electronic Arts, Riot Games, Nintendo, Konami, Valve, Ubisoft, Tencent, Microsoft, Apple, Google, and Sony have been cited in the lawsuit. ANCED is apparently asking for Free Fire's loot boxes to be suspended until their use by children and adolescents can be properly evaluated, with a daily penalty of $4m real (£517k) for Garena if it fails to comply. It's also asking for $1.5bn real (£193m) in compensation from Garena, and individual compensation of $1000 real (£130) for each child or adolescent user of its games.

Prosecutor Luisa de Marillac Xavier dos Passos determined that this would be a good opportunity for the Brazilian justice system to take a look at loot boxes, and possibly implement measures to help protect children (such as the total removal of loot boxes). As such, no action has yet been taken against the named companies, but the judiciary will now investigate the issue independently of the current Brazilian government. The prosecutor felt ANCED's requested compensation amounts were a little out of touch with reality, however, so perhaps it's unlikely we'll see fines quite that large.

Brazil isn't the only country considering bringing loot boxes under its current gambling laws: both the Netherlands and Belgium determined that loot boxes count as gambling, and therefore violated existing gambling legislation. The UK Gambling Commission, meanwhile, has argued that loot boxes do not count as gambling unless there is a "cash out" option, meaning legislation will have to be passed in parliament to introduce regulation. So far the DCMS Committee and House of Lords have argued that loot boxes should be reclassified as gambling, and with a recent study finding a significant link between loot boxes and problem gambling, the pressure is on for new legislation.