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Court Grants Google’s Motion to Dismiss Google Play “Loot Box” Suit

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On Wednesday, Judge Beth Labson Freeman of the Northern District of California issued an order granting Google’s motion to dismiss a lawsuit brought against it relating to so-called “loot boxes” found in some video games on Google Play.

Previously, Google was sued in a putative class-action over gambling-related purchases available in the Google Play store. Specifically, the plaintiffs claimed that Google allowed children to gamble via in-game purchases known as loot boxes through games available in the Google Play store. The items are purchased using real money, but are allegedly considered gambling because the player does not know what is inside the box until it is purchased and opened. Moreover, the plaintiffs alleged that loot boxes “constitute illegal ‘slot machines or devices.’”

Google moved to dismiss the complaint, claiming it is immune from liability under Section 230 of the Communications Decency Act of 1996, that the plaintiffs’ key premise that loot boxes are illegal under California gambling law lacks merit and that the plaintiffs have not alleged significant elements of their claims. Meanwhile, the plaintiffs have opposed the dismissal arguing that Google does not have Section 230 immunity, that loot boxes constitute illegal slot machines or devices under California law and that their allegations are sufficiently alleged.

The order noted that Google “operates the Google Play store from which software applications (‘apps’), including video games containing Loot Boxes, may be downloaded. Google does not create the video game apps or Loot Boxes. Plaintiffs nonetheless allege that Google violates state consumer protection laws by offering video games containing Loot Boxes in its Google Play store and profiting from in-app purchase of Loot Boxes.”

The court noted that at the hearing it stated that it would “dismiss the complaint on immunity under Section 230 of the CDA, with leave to amend, and that it might defer to a later stage of the proceedings the question of whether Loot Boxes constitute illegal gambling devices.”

The court found that Google is entitled to Section 230 immunity to the plaintiffs’ claims. As a result, “Google cannot be held liable for merely allowing video game developers to provide apps to users through the Google Play store, as ‘providing third parties with neutral tools to create web content is considered to be squarely within the protections of § 230.’” This claim was dismissed with leave to amend.

The court also considered the elements of the plaintiffs’ claims, which Google contends they did not adequately plead. Google’s assertion that the plaintiffs failed to allege economic loss or injury was found to be meritorious by the judge. Thus, the motion to dismiss the UCL claim for failure to state a claim was granted with leave to amend.

The court also dismissed the plaintiffs’ CLRA claim with leave to amend, finding that the plaintiffs “have not alleged facts to support their casino theory of liability under the CLRA” and they have “failed to identify any misrepresentations, or indeed any representations at all, made by Google about loot boxes

Finally, the court also dismissed the plaintiffs’ unjust enrichment claims with leave to amend, noting that the plaintiffs cannot proceed without specifying to which state law they seek to apply their unjust enrichment claims.

Google is represented by Baker McKenzie LLP. The plaintiffs are represented by The Law Offices of Andrew J. Brown, as well as Blood Hurst & O’Reardon, LLP.

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