Class Action Lawsuit Brought Against Roblox Over Suspected ‘Content Deleting Scheme’ – CBS San Francisco
SAN FRANCISCO (CBS SF / BCN) – San Mateo game company Roblox Corporation was hit by a federal class action lawsuit on Tuesday for allegedly defrauding users through a “clever content-deletion scheme.”
The lawsuit was filed by a Michigan minor identified only as “Jane Doe” who wishes to represent a class that “includes all Roblox users who have purchased content on the Roblox platform that was later deleted”.
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Roblex says his mission is to “playfully bring the world together”.
The Roblox platform is a virtual universe full of games and experiences developed by third-party developers. Users traverse this “metaverse” with their own avatars and can play games and interact with other users while exploring.
In the first quarter of 2021, Roblox had 42.1 million daily active users who spent 9.7 billion hours on the platform. This is based on a message from the US Securities and Exchange Commission on May 10th.
According to the complaint, the pandemic was very good for Roblox “as the digital world was the only way out for people who are forced to stay at home”.
According to the complaint, 70% of Roblox users are under 18 years old and more than half are under 13 years old.
Roblox posted sales of nearly $ 400 million in the first quarter of 2021, more than double the revenue it had in the same quarter of 2020, according to the SEC filing. Free cash flow, a measure of a company’s ability to generate cash, quadrupled to $ 142.1 million in the quarter.
The dispute has its roots in the way Roblox generates its revenue.
A Roblox user can create a user account to access the multiverse for free, and explore and play games on the platform for free.
Unlike subscription-based games or ad-supported platforms, Roblox makes most of its money with “in-game purchases” as users purchase enhancements for their avatars through in-game purchases.
The improvements range from digital clothing to equipment to body parts or accessories.
The means of payment is a virtual currency called Robux, which can be bought for real money at Roblox. For example, the complaint states that $ 4.99 a user will buy 400 Robux that can be spent at the Avatar Store, where developers put their goods up for sale.
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Roblox cuts by 30% depending on the suit.
While the complaint relates to any number of questionable activities that take place on the Roblox platform when some developers attempt to exploit or take advantage of young users, the lawsuit is narrowly focused on a business practice by Roblox that the plaintiff believes is fraudulent and against the California consumer denominated violating laws.
The lawsuit alleges that Roblox has loosely and poorly reviewed the content going into the Avatar Store for purchase. This allows many questionable products to be put up for sale. The lawsuit states: “Branded, vulgar, or otherwise objectionable content is in high demand.”
Roblox can later delete the content from the platform under the “Content moderation” banner.
According to the plaintiff, the problem is that this moderation does not take place in advance, but only after customers have already bought “clothing, equipment, animations, simulated gestures, emotes or other objects” for their avatars – and Roblox has already collected its 30% fee .
Since the objects that users buy are intangible, nobody gets around to repossessing the assets. When the content is moderated, the elements simply disappear.
The crux of the dispute is that if the content is moderated, Roblox will not refund the Robux spent on purchasing the in-game content.
For example, a digital “tailcoat” or “big sad eyes” or “extreme headphones” that were bought on Monday could be removed from the platform on Tuesday and the buyer would not receive any compensation.
The complaint states: “As a result, users sometimes only have a fleeting moment to enjoy their newly purchased items in the Avatar Shop. Roblox deleted items days, months, and even years after they were purchased. Worst of all, however, Roblox will refuse to refund or credit user accounts after these items are deleted. “
The complaint further alleges that Roblox’s moderation of content is a sham and “nothing more than cover for trying to generate additional income with its users – who are mostly children”.
“Roblox routinely removes content that does not appear to be in violation of the platform’s policies, and its content” moderation “structure does not do so with consistency, accuracy or transparency,” the lawsuit said.
Roblox did not immediately respond to a request for comment on the allegations in the lawsuit.
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