Hoyoverse, the publisher of the popular game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC). The settlement includes a ban on selling loot boxes to users 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 deceptive marketing tactics that led players, particularly children and teens, to spend significant sums on in-game prizes with low odds of winning. He emphasized that companies employing such "dark patterns" will face consequences.
The FTC's primary allegations against Hoyoverse involve violations of the Children's Online Privacy Protection Rule (COPPA). The agency claims Hoyoverse marketed Genshin Impact to children, collecting their personal data without proper consent. Furthermore, the FTC alleges the company misled players regarding the odds of obtaining "five-star" loot box prizes and the overall cost involved. The FTC contends the game's virtual currency system was designed to be confusing and unfair, obscuring the high cost of acquiring desirable prizes and resulting in substantial spending by children.
In addition to the financial penalty and the sales restriction, the settlement requires Hoyoverse to:
- Publicly disclose the odds of winning loot box prizes and the exchange rates for virtual currency.
- Delete personal information collected from children under 13.
- Ensure future compliance with COPPA regulations.
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