The time has come to take a closer look at loot boxes. The FTC’s workshop, Inside the Game: Unlocking the Consumer Issues Surrounding Loot Boxes, begins at 10:00 ET today. Moments before the start time we’ll post a link to the live webcast.
Blog Posts Tagged with Children
For members of the videogame industry, loot boxes are no game. They’re a serious part of the revenue stream. But do loot boxes – grab bags of digital goodies bought with in-game virtual currency or real money – raise consumer protection concerns? What about the potential impact on young consumers?
Gamers call them loot boxes – in-game rewards players can buy that contain a random assortment of virtual items. The loot may help players advance in an online game or allow them to customize their avatars. The rewards may be virtual, but they’ve become a very real revenue stream for game developers.
Sometimes a picture really is worth a thousand words. According to warning letters from the FDA and FTC, certain sellers of e-liquids – flavorings for e-cigarettes – are using packaging that imitates foods or beverages popular with children. Little kids who ingest what’s inside boxes that appear to be apple juice, cookies, candy, etc., risk acute nicotine toxicity, poisoning that can result in seizure, coma, cardiac and respiratory arrest, and death.
So you’ve received a Civil Investigative Demand (CID) from the Federal Trade Commission related to a consumer protection matter. Now what? We appreciate that it can be daunting for any company – especially a small business – and we want to be as transparent as possible about the process.
Dads and Moms want what’s best for their babies, so some companies feature adjectives like “organic” or “natural” in ads for infant gear. Those are among the terms Illinois-based Moonlight Slumber used to sell its baby mattresses online and at some of the nation’s biggest retailers. But according to an FTC complaint, when it came to backing its mattress claims with proper support, the company was asleep at the switch.
If marketing claims are any indication, “green” paint is popular with consumers, but not just in the sense of emerald, mint, or avocado. Companies are advertising that their paints are emission-free, VOC-free, and without chemicals that could harm consumers, including pregnant women, babies, and people with asthma. Some brands even feature seals and certifications touting purported environmental benefits.
The FTC’s law enforcement action against Amazon for unauthorized billing recently settled, leaving two key takeaways: 1) Consumers are eligible for more than $70 million in refunds; and 2) Businesses need to get customers’ express consent before placing charges on their credit or debit cards.
In Amazon’s Appstore, many apps geared toward kids prompted them to use fictitious currency, like a “boatload of doughnuts” or a “can of stars,” as part of game play. But a federal district court recently agreed with the FTC that Amazon’s practice of charging cold, hard cash for those imaginary items and billing parents and account holders without their express informed consent violates Section 5 of the FTC Act.
A chocolate cake that causes weight loss? A recliner that tones your abs while you watch TV? They’re in our pantheon of products we’d buy in a second. Here’s something to add to that list: a videogame scientifically proven to help kids focus, enhance memory, boost attention, and improve behavior and school performance. That’s what Focus Education promised in infomercials and other ads for its ifocus System Jungle Rangers videogame.
Silence may be golden, but not for the parents of kids with speech disorders. Illinois-based NourishLife marketed two dietary supplements, Speak and Speak Smooth, advertised as the answer for kids with a broad range of speech disorders, including those associated with autism. But the FTC says the company’s claims were long on talk and short on scientific substantiation.
Parents want to make the best choices for their babies’ health. But between diaper changes and 2 AM feedings, they aren’t in a position to spend much time surveying the scientific literature for ways to reduce the chance their kid will develop the allergies they suffer from. So when Gerber (also doing business as Nestle Nutrition) advertised Good Start Gentle baby formula as a way to “reduce the risk of developing allergies” – and featured a gold seal on products suggesting FDA approval – it’s understandable that parents would take note.
A. This company just settled a case with the FTC for Do Not Call violations and deceptive promises that its purported educational products would improve kids’ grades and standardized test scores.
Q. What is WordSmart?
The polar bears and penguins sold within kids’ apps offered in the Google Play Store may have been virtual, but the unauthorized charges Moms and Dads got stuck with were all too real. A proposed FTC settlement will refund at least $19 million to parents whose accounts were charged illegally, according to the complaint, and will implement enforceable changes in how Google handles in-app purchases. Of course, the order applies just to Google, but the case off
With a product name like “Your Baby Can Read!” – exclamation point in the original – it didn’t take long for consumers to figure out what the marketers were promising. The company’s massive ad campaign featured 14-month-olds mastering vocabulary flashcards, two-year-olds reading books, and an array of charts, graphs, and studies purporting to show that Your Baby Can Read! was scientifically proven to work.
For some athletes and fans, September is the equivalent of the start of the sports “new year.” From the FTC’s perspective, it’s a good time to remind retailers that they need appropriate proof to support concussion protection claims for athletic mouthguards. That’s why FTC staff has sent letters to five major retailers, alerting them to concerns about what they’re promising on their websites.
Dare us to describe the legal ramifications of a recent advertising settlement involving health claims in the style of a cringeworthy rap from 1990? Cue up the bass line ‘cause here we go.
Update (3/27/14): Apple will notify people about how to get refunds by April 15. The settlement requires Apple to provide full refunds for in-app charges made by kids without parental permission.
If you want to know which flix’s tix made for major boffola at the box office, you’ll have to consult the entertainment trade press. But a recent FTC “mystery shopper” survey offers other insights for your clients in the movie, music, or videogame industry.
Next time you’re in a long line at the grocery store, watch how parents distract a kid who's feeling cranky. They used to jangle keys or offer a favorite toy. But now a lot of Moms and Dads hand them a smartphone with an app designed for children. As the kids' app market continues to grow, FTC staff issued a report detailing survey results showing that neither app stores nor app developers were giving parents the information they need to figure out what data is being collected from their kids, how it’s shared, and who has access to it. The report recommended that members of the app indu