GME3: Robuck For Your Thoughts?, Not-So-Incognito, & Former Apprentices Gone Rogue!

For this week’s extra-litigious GME3, we’re looking at a class action suit targeting Roblox for allowing their in-game currency, known as Robux, to be used to facilitate online gambling among minors. Additionally, we’re examining another class action that challenges Google’s data collection policies, and, for our final lawsuit of the week, Donald Trump’s attempt to sue the co-founders of Truth Social for mismanagement. Read on for the full stories!

Gambling

Robuck For Your Thoughts?

Roblox, an extremely popular online game targeted at younger demographics, has been found guilty of negligently allowing minors to use in-game currency in online casinos.

In August of 2023, a class of parents banded together to sue Roblox for allegedly providing an illegal gambling ring for children by allowing Robux, their in-game currency used for microtransactions, to be used on third-party gambling sites. The class further claimed that Roblox was knowingly allowing this to happen, and also profited considerably from the practice due to the 30% they were charging for the gambling platforms to convert Robux back into cold, hard cash. As a result, the plaintiffs accused Roblox of violating the Racketeer Influenced and Corrupt Organizations Act, as well as several state statutes.

While U.S. District Judge Vincent Chhabria dismissed any racketeering charges, this Tuesday he did rule that Roblox was, in fact, negligent and violated California’s Unfair Competition Law. Specifically, he stated that: “The baseline rule is that Roblox had a duty to use reasonable care in its conduct, the creation and management of its platform, to avoid creating an unreasonable risk of harm to others.”

Roblox rebutted that the third-party gambling platforms in question should be the ones to face the consequences, as any economic loss experienced stemmed from a minor exchanging Robux with an online casino, not engaging with Roblox itself. However, Judge Chhabria dismissed this argument, claiming that Roblox did “knowingly and improperly facilitate and profit from these online casinos.” Furthermore, the company engaged in negligence by not informing parents about the possibility of wagering Robux or that part of their business model involved converting Robux back into dollars for profit.

The case will next move into the discovery phase, with 14 days for the parties to submit amended complaints.

Media

Not-So-Incognito

Google has agreed to destroy billions of data records to settle a class action lawsuit that claims the tech giant covertly tracked the internet activity of users using private browsing or “Incognito” mode. 

Terms for the settlement were filed on Monday, and lawyers for the plaintiffs valued the agreement between USD $5 billion and $7.8 billion. While the court is not implementing any monetary penalty at this point, users have the option to sue the company individually for damages.

The class action began back in 2020 but covers the millions of users who used Google’s private browsing mode since June 1, 2016. By tracking people’s data in this way, Google became an “unaccountable trove of information,” the suit alleges.

As a result of the settlement, Google will be forced to disclose exactly what info they collect in their “private” browsing mode, which will lead to them collecting less data and, therefore, less money from selling said data. David Boies, a lawyer working on behalf of the plaintiffs, called the settlement “a historic step in requiring honesty and accountability from dominant technology companies.”

Entertainment

Former Apprentices Gone Rogue!

In the previous edition of the GME3, we spent some time covering the official launch of Truth Social, a new social media platform founded under the umbrella of former President Donald Trump’s company Trump Media. Just last week the company was flying high, with an estimated market value of close to $8 billion, and it felt like just maybe Truth Social could become the little platform that could.

Unfortunately for Truth Social, and its many investors, disaster has struck in the form of a lawsuit, as Donald Trump has sued the platform’s co-founders, alleging mismanagement. Specifically, the suit accuses the co-founders, Wes Moss and Andy Litinsky, of making “a series of costly mistakes that resulted in a long delay in the company’s going public.” This includes establishing corporate governance for the new company, as well as finding an acquisition company that could take the new platform public. The suit alleges that they failed to fulfill either of these tasks. 

As a result of the suit, Trump is seeking to reclaim the stock that the duo currently controls. Moss and Litinksy, who originated as contestants on Trump’s NBC show “The Apprentice,” came to him with the concept for Truth Social after the former President was booted off of Twitter (now X) in the aftermath of the January 6 Capitol Riots. This high-profile suit is not the first clash between Trump and the former Apprentices. In February, Moss and Litinsky sued Trump Media, alleging that the company was attempting to dilute their shares in Truth Social by increasing the total number of authorized shares in the firm from 120 million to 1 billion.

With news of the clash (and the platform’s reported loss of $58.2 million on revenue of $4.1 million in 2023), Truth Social’s valuation has plummeted. The shares of Truth Social have plummeted in cost to under $50/share, compared to the $60 they were worth at the end of last week.