AD-ttorneys@law – March 11, 2021

Alerts / March 11, 2021

In This Issue:

FTC Shines Light Inside ‘Dark Patterns’

Move over cookies, fingerprinting, ad trackers—there’s an old species of internet chicanery in town

Everything Old …

It’s hard to find a nongovernmental clearing house filled with useful and unbiased information. Normally we find ourselves running around the same circuit of trusted watchdog organizations for source material.

But we’re happy to say we’ve found a brand-new resource for our gentle readers to check out:

Launched by Harry Brignull, a U.K.-based cognitive scientist and user-experience courtroom witness, the site is a helpful introduction to/encyclopedia of “dark patterns,” a set of allegedly manipulative user interface designs deployed by website engineers.

It’s important to note that the phrase “dark patterns” doesn’t necessarily comprise new practices. It encompasses a number of design approaches—some are tried-and-true, like unsubscribe options written in tiny fonts at the bottom of a marketing email. Others are novel, like the fake screen smudges that one designer placed on a button graphic—users were tricked into clicking the button when they tried to brush off the smudge.

It’s Hard to See in Here

So dark patterns is an umbrella term for the ever-growing, ever-evolving collection of manipulative web design practices—a novel way of rounding them all up under one conceptual framework.

Many of these practices, like the tiny unsubscribe text, are combatted by well-established, well-worn legal remedies; others are not—for instance, the “roach motel” design.

Brignull defines roach motels as website designs that make it easy for you to get in—to register for an account, for instance—but exceedingly difficult to get out. If you’ve ever searched in vain for a “cancel my account” link, you’ve been stuck in a roach motel.

But if you have been stuck in one of these virtual roach motels, you won’t find a clearly defined legal path to address your plight. Dark patterns can fall on either side of legality, which is probably what makes them so popular for certain companies.

The Takeaway

Which is why the Federal Trade Commission’s (FTC) recent attention to the problems posed by dark patterns is interesting.

Dark patterns have been on the FTC’s radar for a while—here are some remarks on the subject from Commissioner Chopra from last year—and the FTC is planning a more fulsome review of the practices this coming April.

The FTC’s “Bringing Dark Patterns to Light” virtual workshop, scheduled for April 29, will cover “the ways in which user interfaces can have the effect, intentionally or unintentionally, of obscuring, subverting, or impairing consumer autonomy, decision-making, or choice.” If you have something to contribute, from ideas for panels to research, click the link. The FTC is open for suggestions.

The fact that this workshop will examine such a broad category of behavior, both legal and illegal, may indicate a sea change in the way the public conceptualizes the dangers of the web.

Google’s Stadia Rocked by FPS and Image Quality Claims

Class action asserts company misrepresented the quality of its game-streaming service

High Definitions

For the non-gamers out there, we’d like to define a term or two before we dive into this latest case.

When it comes to video games, 4k resolution and 60 frames per second (FPS) is gold-standard image quality and frame frequency.

Resolution of 4k produces the image quality one expects from a quality digital display—a huge leap forward from the earlier 1080p HD. How do we know? The images look crisper and deeper (and in any case, 4k is a higher number than 1080, so it must be better, right?).

FPS measures the speed with which the images on screen are refreshed. The higher the FPS, the more “real” the motion looks. Standard modern-day video presents 60 FPS (early motion pictures, by contrast, served up content at mid-20s FPS).

Images at 4k presented at 60 FPS is the high-end gaming standard produced by top gaming consoles like Microsoft’s Xbox One X and the Sony PlayStation 4 Pro (though the just-released nerd-freak-out-generator PlayStation 5 can produce 4K resolution at 120 FPS).

Here, the consoles are the key—they deploy immense processing power to produce high-quality images, quickly.

There Goes Google, Disrupting Everything Again

Even powerful console game systems can struggle with poor Internet connections; a lot of bandwidth is required to keep online gamers in sync.

That’s why when Google announced its Stadia video streaming service, there was much oohing and ahhing. Google promised to dispense with the console, claiming they could deliver similar gaming quality from a streaming service that would offer games to users, over the Internet, to multiple devices—television, PC tower or telephone.

Can you see the lawsuit coming in crisp, high definition?

Jacqueline Shepherd, denizen of the great state of New York, sued Stadia and two game companies in Queens County Supreme Court back in October, and the case was bumped to the Eastern District of New York in February.

The Takeaway

Shepherd alleged that the companies committed “unfair and deceptive trade practices concerning the advertised display quality and resolution of video games distributed by Google Stadia.” She claims that Google executives announced that “all of the video games on the Google Stadia platform would support 4k resolution at launch” and that Google failed to correct false claims that “surfaced across the United States and the world, stating that every Google Stadia game, even older games, would be available to play at 4k resolution.”

The claims did not pan out in actual play, Shepherd states, citing numerous nerd-rage incidents in both the gaming and mainstream press criticizing Google for failing to live up to its claims. She’s suing for violations of numerous state consumer protection laws, unjust enrichment, breach of contract and negligent misrepresentation.

Unlike other attacks on Google as a platform for content or apps, this case might be hard to dodge—after all, Shepherd is suing the platform itself for not delivering on its own promised platform features.

OMG – It’s an Epic … Settlement?

Suit attacking loot box contracts stumbles to a sleepy conclusion

New Inflection

Not so long ago, we brought you the case of Jillian Williams and her son K.W., who were suing Epic Games for its allegedly inappropriate sale of in-game currency and items to minors in the company’s mega-hit Fortnite.

Her class action is an interesting derivation of the larger litigation trends in this area. Williams claims that contracts executed between minors and Epic Games in the purchase of in-game items are invalid and is suing to disaffirm or void them altogether. That’s a lot of in-game loot.

Sincerest Form of Flattery?

And … along comes another class action, brought by different plaintiffs in Wake County, North Carolina, Superior Court in early January. Filing along similar lines—negligent misrepresentation, unfair practices under consumer protection laws—counsel also sought declaratory judgment to disaffirm the contracts on account of the minor status of some of the plaintiffs.

At the heart of the claims was the argument that applicable state law allows minors “to disaffirm contracts without any restrictions … . Yet, Epic operates a non-refund policy that misleads, misrepresents, and does not acknowledge a minor’s right to get a refund.”

The Takeaway

This Wake County action, which never made the jump to federal court, was settled a month after the action was filed. The agreement provided more than $26 million to U.S.-based players of Fortnite and its lesser-known Epic sibling Rocket League.

Did Williams’ suit (filed in early February, before the settlement, in California’s Northern District) draw inspiration from this class action? Epic believes it did—or at least, that the settlement should encompass “all of the claims K.W. and Ms. Williams assert in this matter.” The plaintiffs, of course, are objecting to this argument.

We’ll have to see how the federal case resolves (or evolves), but if it escapes being sucked into the settlement, “contract disaffirmation” actions may continue to be a growing, long-term trend.

Post Foods Settles Sugar Suit

Class action ends with $15 million fund and the loss of certain marketing tags

Our Daily Dread

Here’s a blast from the past…

It was August 2019. Protests smoldered in Hong Kong. Wildfires swept across the Amazon forest. A glacier in Iceland completely melted away. And …

You know what? Forget August 2019. We hope you have some fond memories from that summer, but between political instability and ecological disaster, we don’t want to remember it at all. Too much tsuris.

If you prefer your trouble on the quotidian side, though, the battle that raged that summer between Post Foods Inc. and consumer plaintiffs Debbie Krommenhock and Stephen Hadley, while being a comparatively bite-sized conflict, was still a mouthful.

Cereal Drama

As we wrote that lovely summer, Post had just filed a motion to dismiss in a long-running case about the sugar content of its iconic cereal brands.

The plaintiffs had lodged broad allegations: Because excessive consumption of sugar is highly toxic to the human body, Post Foods’ use of health benefit claims in marketing its supposed sugar-laden cereals constituted false advertising and unfair competition. …

Among other things.

The third amended complaint in the suit, filed in October 2020, was, like its predecessors, a monster. The charges were festooned with allegations of immoral marketing to kids (“the most vulnerable to the dangers of excess added sugar consumption,”) and 34 pages of anti-sugar studies and statistics, which you should probably ignore if you still love the cereals of your youth.

Many claims had withered on the vine since the action’s inception in 2016, but Post’s most interesting objection to the whole affair (the subject of our August 2019 post) failed: a free speech argument.

The motion argued that “the Constitution prohibits Plaintiffs from using government force to suppress Post’s truthful speech. Plaintiffs may advocate their own health views. They may attempt to persuade the FDA, USDA, or other government entities to regulate added sugar. But they cannot use government coercion to bar truthful speech about the ingredients and nutritional content of cereal out of the misplaced concern that people cannot be trusted to act wisely on that information.”

The Takeaway

This argument was denied in an order from the court last March, and, despite a few issues that remained, the parties got together to talk shortly thereafter. The settlement agreement putting this behemoth to bed was reached only a few weeks ago and was just approved by the court.

The agreement began by positing a class of U.S. consumers who devoured Post cereals between August 2012 and November 2020, including popular brands like Honey Bunches of Oats, Raisin Bran and Waffle Crisp. That’s a lot of cereal.

As part of the settlement, the company will pull back from certain packaging claims on cereals with more than 10 percent calories from added sugar (“wholesome” and “less processed,” for instance, are axed). Post will also establish a $15 million settlement fund.

The lesson? We’ve said it so many times now that we’re going to have to assign it a macro in Microsoft Word: Context is King.

Post tried to split claims regarding its products’ healthy ingredients away from their overall possible health effects. But consumers have legal justification to demand that labeling claims present a truthful picture of the whole.

EULA Button Forces Class Action into Arbitration

Electronic Arts may have used sound webpage design to dodge a loot-box showdown

An Embarrassment of Twitchers

There’s been a rising tide of loot-box-gambling litigation in recent years—often specifically focused on the effects of loot-box purchases on children.

Loot boxes are small, in-game purchases that offer in-game advantages—items and skills that better the user’s odds of dominating in the game, or new character skins that provide pleasure in or confer status on the user’s in-game appearance. Because loot boxes feature a random element—truly valuable boxes are rare—repeated purchases can take on an addictive flavor that some have alleged resembles gambling. As we wrote in an earlier blog post, they’re like a lottery ticket, baseball card pack and cereal mystery prize rolled up in one.

Check out some of our earlier case coverage here, here, here and here.

The latest case, Ramirez v. Electronic Arts, Inc., is similar to many of the disputes we’ve covered before, especially Zajonc v. Electronic Arts, which we wrote about toward the end of last year.

Both cases take Electronic Arts (EA) to task over their version of the loot box—AKA the “player pack” or “ultimate team pack” in EA parlance. Kevin Ramirez, who filed his class action in August of last year in the Northern District of California, claims that EA’s “Ultimate Team Packs have all the hallmarks of a Las Vegas-style slot machine, including the psychological aspects to encourage and create addiction.”

Ramirez alleges that EA-sponsored addiction yields big bucks for the company: “Loot Boxes account for approximately 30% of EA’s revenues,” having “earned more than $5.5 billion dollars in net revenue for fiscal year 2020.”

Ramirez is suing under the Golden State’s Unfair Competition Law and Consumer Legal Remedies Act.

The Takeaway

Unfortunately for Ramirez, EA’s bid to kick the dispute over to arbitration seems to have worked. And there’s a lesson in this: EA claims that it made it impossible to play the game without taking definitive notice of the end user licensing agreement, which contains the arbitration provision.

“Plaintiff was required to click a button affirmatively indicating he accepted the User Agreement before he could access and play FIFA 20 or Madden NFL 20,” the complaint reads. “Notably, courts have enforced agreements to arbitrate where users had far less notice of the arbitration provision and were not required to affirmatively indicate their agreement to the terms by clicking a button.”

The court agreed during a recent hearing, holding that the arbitration provision was the “death knell” of the case, despite the fact that the allegations were “disturbing.”

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