Hoyoverse, the publisher of the popular game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC). This settlement includes a ban on selling loot boxes to players under 16 without parental consent.
The FTC's press release details the agreement, stating Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases without parental authorization. FTC Bureau of Consumer Protection Director Samuel Levine criticized Hoyoverse's practices, alleging the company misled players, particularly children and teens, into spending significant sums on in-game prizes with low win probabilities. He emphasized the FTC's commitment to holding companies accountable for employing deceptive "dark pattern" tactics.
The FTC's primary allegations against Hoyoverse center on violations of the Children's Online Privacy Protection Rule (COPPA). Specifically, the FTC claims Hoyoverse marketed Genshin Impact to children, collected their personal information without proper consent, and misrepresented the odds of winning coveted "five-star" loot box prizes and the associated costs. The FTC further contends that the game's virtual currency system was designed to be confusing and unfair, masking the substantial financial investment required to obtain these rare prizes, leading to significant spending by minors.
In addition to the financial penalty and the loot box sales restriction, the settlement mandates Hoyoverse to: publicly disclose loot box odds and virtual currency exchange rates; delete personal information collected from children under 13; and ensure future compliance with COPPA regulations.
