Roblox Accused in Suit of Cheating Kids With Bogus Purchases

Roblox Corp. was accused in a lawsuit of ripping off users -- mostly children -- of its popular gaming platform by selling them in-game items and later deleting them without reimbursement.

Users of the virtual world platform purchase extra items for their characters in the company’s Avatar Shop. Those items include digital clothes and accessories. The objects are created by both Roblox and outside developers, with the company earning a 30% commission on third-party sales.

The company doesn’t immediately vet products put on sale but will later delete them citing violations of the game’s moderation policies, according to the complaint filed Tuesday in San Francisco federal court. The policies ban items deemed inappropriate, such as those that include pornographic images or reproductions of copyrighted logos.

“The company’s decision to sell first and ‘moderate’ later has obvious monetary benefit for Roblox,” according to the lawsuit. “By the time defendant has deleted items from the Avatar Shop and users’ inventories, it has already taken its 30% commission from the sale.”

Roblox declined to comment. According to the company’s prospectus, “content submitted by developers and creators, including images, models, meshes, and audio, goes through a multi-step review process before appearing on the platform.”

San Mateo, California-based Roblox had the third-highest grossing game of 2020 with revenue of $2.29 billion, according to a Nielsen Company report. The company planned an initial public offering last year, but delayed it until 2021 and then switched to a direct listing, which typically doesn’t result in any new capital being raised.

The New York Stock Exchange set a share price of $45 for Roblox’s direct listing in March, which gave the company a market value of about $30 billion. The shares have doubled since and traded at $89.32 Tuesday.

The proposed class-action lawsuit was filed by a Michigan girl, identified as Jane Doe, and her father. The girl bought “numerous” objects in the Avatar Shop, including digital pajamas, according to the suit.

She “made these purchases with the understanding that the items would remain in her inventory and be usable on the platform,” according to the suit. But Roblox deleted several of her purchases “without warning or explanation.”

The deleted items didn’t contain offensive or trademarked content, according to the lawsuit.

At least 70% of Roblox’s users are under 18, with more than half the users being children under 13, according to the lawsuit.

The suit is Doe v. Roblox Corporation, 21-cv-03943, U.S. District Court, Northern District of California (San Francisco).

©2021 Bloomberg L.P.

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