Take-Two Interactive Software, Inc. and Rockstar Games, Inc.; Analysis of Proposed Consent Order To Aid Public Comment, 34620-34621 [E6-9359]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 71, Number 115 (Thursday, June 15, 2006)]
[Notices]
[Pages 34620-34621]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-9359]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 052 3158]


Take-Two Interactive Software, Inc. and Rockstar Games, Inc.; 
Analysis of Proposed Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of Federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before July 10, 2006.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Take-Two Interactive Software, Inc., et al., 
File No. 052 3158,'' to facilitate the organization of comments. A 
comment filed in paper form should include this reference both in the 
text and on the envelope, and should be mailed or delivered to the 
following address: Federal Trade Commission/Office of the Secretary, 
Room 135-H (Annex N), 600 Pennsylvania Avenue, NW., Washington, DC 
20580. Comments containing confidential material must be filed in paper 
form, must be clearly labeled ``Confidential,'' and must comply with 
Commission Rule 4.9(c). 16 CFR 4.9(c) (2005).\1\ The FTC is requesting 
that any comment filed in paper form be sent by courier or overnight 
service, if possible, because U.S. postal mail in the Washington area 
and at the Commission is subject to delay due to heightened security 
precautions. Comments that do not contain any nonpublic information may 
instead be filed in electronic form as part of or as an attachment to 
email messages directed to the following e-mail box: https://
secure.commentworks.com/ftc-taketwo/.
---------------------------------------------------------------------------

    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See Commission Rule 4.9(c), 
16 CFR 4.9(c).
---------------------------------------------------------------------------

    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at https://www.ftc.gov. As a matter of discretion, the FTC 
makes every effort to remove home contact information for individuals 
from the public comments it receives before placing those comments on 
the FTC Web site. More information, including routine uses permitted by 
the Privacy Act, may be found in the FTC's privacy policy, at https://
www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Richard F. Kelly (202/326-3304) or 
Keith R. Fentonmiller (202/326-2775), Bureau of Consumer Protection, 
600 Pennsylvania Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 of 
the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given 
that the above-captioned consent agreement containing a consent order 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for June 8, 2006), on the World Wide Web, at https://www.ftc.gov/os/
2006/0/index.htm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a consent order from Take-Two 
Interactive Software, Inc. and Rockstar Games, Inc. (``the 
companies''). The proposed consent order has been placed on the public 
record for thirty (30) days for receipt of comments by interested 
persons. Comments received during this period will become part of the 
public record. After thirty (30) days, the Commission will again review 
the agreement and the comments received, and will decide whether it 
should withdraw from the agreement or make final the agreement's 
proposed order.
    This matter involves alleged deceptive representations in 
advertising and on product packaging concerning the content in the 
video game Grand Theft Auto: San Andreas (``San Andreas''). In 
September 2004, the companies submitted materials to the Entertainment 
Software Rating Board (``ESRB'') for the purpose of obtaining a rating 
for the PlayStation 2 version of San Andreas. The companies did not 
inform the ESRB about the existence of an interactive sex mini-game 
that was embedded in the game's computer code, but was inaccessible 
during normal game play. Nor did the companies tell the ESRB that the 
game disc contained data files (unused in game play) for female skins, 
which, if accessed, render the female characters partially or 
completely nude. However, the ESRB's published requirements in effect 
at that time did not state that game companies were required to 
disclose unused skins in the game software or content in the game code 
that was inaccessible and unplayable without modifying the code. Based 
on the companies' submission, the ESRB assigned San Andreas a M (Mature 
17+) rating and content descriptors for Blood and Gore, Intense 
Violence, Strong Language, Strong Sexual Content, and Use of Drugs. The 
companies released the Playstation 2 version of San Andreas in October 
2004.
    On June 7, 2005, the companies released versions of San Andreas 
playable on PCs and the Xbox console. The PC and Xbox game discs also 
contained the same code for the sex mini-game and the nude skins. As 
with the PlayStation 2 version, the companies did not disclose the 
existence of the disabled sex mini-game or the nude skins on the PC and 
Xbox game discs. The ESRB rated the PC and Xbox versions of the game M 
(Mature

[[Page 34621]]

17+) and assigned the same content descriptors previously assigned to 
the PlayStation 2 version.
    The ESRB rating information appeared in print, television, and 
retailer advertisements for Grand Theft Auto: San Andreas, and on game 
packaging, for all three versions of the game. Among other things, the 
companies made the following claims about the game: ``MATURE 17+ * * * 
M * * *'' and ``CONTENT RATED BY ESRB.'' None of the advertising 
mentioned that the game contained nudity.
    On June 9, 2005--two days after the release of the PC version of 
the game--game enthusiasts posted a program on the Internet, which, 
when downloaded and installed on a user's PC, enables the sex mini-game 
code. This program was dubbed ``Hot Coffee.'' A subsequent version of 
the program imported nude skins resident on the game disc onto several 
of the female characters. PlayStation 2 and Xbox players eventually 
were able to access the mini-game by physically modifying or adding a 
hardware accessory to their game console, installing special software, 
and inputting cheat codes developed by third parties.
    On July 20, 2005, the ESRB revoked the existing rating for the game 
as a result of, among other things, viewing Grand Theft Auto: San 
Andreas as modified by the Hot Coffee program and the widespread 
availability of that program. The companies entered into an agreement 
with the ESRB that provided that they would not contest a change in 
rating for the game from M (Mature 17+) to AO (Adults Only 18+) with an 
additional content descriptor for nudity. The companies also agreed to 
re-label or recall all existing inventory, and to make available to 
consumers a downloadable patch rendering the Hot Coffee content 
inoperable. In response, most retailers decided not to sell the re-
labeled AO version of the game. In September 2005, the companies 
released a second M-rated version of San Andreas without the Hot Coffee 
content.
    According to the FTC complaint, the companies represented, 
expressly or by implication, that the ESRB had rated the content of the 
original versions of Grand Theft Auto: San Andreas M (Mature 17+) and 
that the ESRB had assigned the following content descriptors as part of 
the ESRB rating: Blood and Gore, Intense Violence, Strong Language, 
Strong Sexual Content, and Use of Drugs. The complaint alleges that the 
companies did not disclose to consumers that the game discs contained 
unused, but potentially viewable, nude female skins and disabled, but 
potentially playable, software code for a sexually explicit mini-game 
that the ESRB had not rated. The presence on the game discs of this 
unrated content that might change, and, in fact, did change, the rating 
of the game to AO (Adults Only 18+) with an additional content 
descriptor for nudity, would have been material to many consumers, 
particularly parents, in their purchase, rental, or use of the product. 
The complaint alleges that the companies' failure to disclose these 
facts, in light of the representation made, was and is a deceptive 
practice.
    The proposed consent order contains provisions designed to prevent 
the companies from engaging in similar acts and practices in the 
future. Part I of the consent order requires the companies, in 
connection with the advertising, sale, or distribution of any 
electronic game, to disclose, clearly and prominently, on product 
packaging and in any promotion or advertisement for an electronic game, 
content relevant to the rating, unless that content has been disclosed 
sufficiently in prior submissions to the rating authority. Part I also 
prohibits the companies from misrepresenting the rating or content 
descriptors for an electronic game, and requires the companies to 
establish and implement, and thereafter maintain, a comprehensive 
system reasonably designed to ensure that all content in an electronic 
game is considered and reviewed by the companies in preparing 
submissions to a rating authority. Finally, Part I of the order states 
that nothing in the order shall constitute a waiver of the companies' 
right to assert that any of their conduct is or was protected by the 
First Amendment to the United States Constitution or any analogous 
provision of a State constitution, except that the companies 
nonetheless acknowledge their obligations to comply with the order.
    Parts II through V of the consent order require the companies to 
keep copies of relevant advertisements and promotional materials, to 
provide copies of the order to certain of their personnel, to notify 
the Commission of changes in corporate structure, and to file 
compliance reports with the Commission. Part VI provides that the order 
will terminate after twenty (20) years under certain circumstances.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E6-9359 Filed 6-14-06; 8:45 am]
BILLING CODE 6750-01-P