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 players under 16 without parental consent.
The FTC's press release details the settlement, stating Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's practices, alleging they 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 tactics.
The FTC's primary allegations against Hoyoverse involve 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, as well as the cost of obtaining them. The FTC further contends that the game's virtual currency system was designed to be confusing and unfair, leading to substantial, often unexpected, monetary expenditures by players, including children who spent hundreds or even thousands of dollars.
In addition to the financial penalty and the sales restriction, the settlement requires Hoyoverse to publicly disclose loot box odds and virtual currency exchange rates, delete personal data gathered from children under 13, and ensure future compliance with COPPA regulations.
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