Genshin Impact developer Hoyoverse has agreed to 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.
In an FTC press release, the agency stated that Hoyoverse will pay the $20 million fine and implement measures to prevent underage purchases without parental permission. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, criticized Hoyoverse for deceptive practices, stating that the company misled children, teens, and other players into spending significant sums on in-game prizes with low odds of winning. He emphasized the FTC's commitment to holding companies accountable for using manipulative tactics, particularly those targeting young people.
The FTC's complaint alleges that Hoyoverse violated the Children's Online Privacy Protection Rule (COPPA) by marketing Genshin Impact to children and collecting their personal information without proper consent. Further allegations include deceptive practices regarding the odds of winning "five-star" loot box prizes and the actual cost of obtaining them. The FTC argued that the game's virtual currency system was confusing and unfair, concealing the high cost of acquiring desirable prizes and leading children to spend 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 information collected from children under 13, and ensure future compliance with COPPA regulations.
