Recently the Dutch District Court of The Hague ruled in favour of the Dutch Gaming Authority in its case against Electronic Arts (EA). The Court held that the loot boxes in FIFA 2019 are in violation of the Dutch Betting and Gaming Act, because the loot boxes are a standalone game of chance and you can win prizes with that game of chance.
This ruling effectively meant that EA needed to remove the loot boxes from FIFA Ultimate Team mode (‘FUT-mode’) in its FIFA games, or risk incurring severe fines (€ 250,000 per week, with a maximum of € 5,000,000). EA therefore requested relief from the Dutch Council of State – the country’s highest court in this case. That relief was granted by the Council of State on Friday 5 February 2021. In this blog, I will explain the Council of State’s ruling and its implications.
What were EA’s arguments?
EA put forward the following arguments:
- EA has to change a fundamental dynamic of the FIFA games in order to comply with the order;
- Changing the FIFA game in this way would lead to severe, unresolvable technical complications in and outside of the Netherlands. It would destabilise the FIFA games;
- EA had only three weeks after the District Court’s judgment to comply with the order, yet a suitable solution would take longer than that;
- FIFA 2020 was released on 9 October 2020 and gamers bought that game in the expectation that they could play the FIFA Ultimate Team mode. If this mode turned out not to be playable, gamers might seek to sue EA;
- Competitive e-sports will be hampered by the change in FIFA;
- EA will suffer serious reputational damage as a result of the change.
Nothing new on the merits of the case
The Council of State did not rule on the merits of the case, but only weighed the interests of EA versus those of the Gaming Authority. On that basis, the Council of State decided to grant relief to EA.
It is not unusual for the Council of State to bypass the merits of the case in a case like this, where a relatively complex point of law is being contested while the appellant’s case is not evidently hopeless. The idea behind this is that it is better to leave a discussion of the merits of the case where it belongs: in the appeal, where it can receive due attention.
Why was relief granted?
The Council of State granted relief on the basis of the following arguments:
- The packs have been in FIFA for the past 10 years. Although this does not mean that the Gaming Authority cannot enforce the Betting and Gaming Act in this case, it does constitute a relevant factor for the court when determining whether to grant relief (‘if you could wait 10 years to enforce this, you can wait another year’);
- Although the Gaming Authority intends to enforce the law with a view to preventing minors from being exposed to gambling, among other reasons, it has failed to provide concrete evidence or statistics that suggest that the loot boxes cause gambling addiction amongst minors;
- The three weeks that EA had to comply with the order might be too short to comply, as shown by two expert opinions written for EA. While the question whether the deadline to comply was reasonable will be determined in the appellate proceedings, the Gaming Authority did recognise that it cannot exclude the possibility that the deadline of three weeks is indeed too short to comply;
- Although EA was previously able to quickly amend the game to comply with the gaming regulations in Belgium, a similar alteration to the one in Belgium would be insufficient to comply with the Dutch Betting and Gaming Act;
- That means that the only way for EA to ascertain compliance with the order would be (i) to shut down the FUT mode for the Netherlands or (ii) to block Dutch accounts;
The Council of State concluded that, considering these circumstances, it would grant relief pending EA’s appeal before the Council of State. The Dutch Gaming Authorities order is therefore stayed until further order.
What does that mean?
The relief means that EA is still formally required to remove the loot boxes, but it will not be forced to do so by the Gaming Authority pending its appeal before the Council of State. Thus, the loot boxes have not suddenly become legal as a result of this judgment, but EA does not have to remove the loot boxes from FIFA for the time being.