Hoyoverse, the publisher of the popular mobile game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC). The settlement addresses allegations of deceptive practices targeting children and teenagers.
The FTC's press release states that Hoyoverse will pay the fine and implement changes to prevent underage players from making in-app purchases without parental consent. Specifically, children under 16 will be blocked from purchasing loot boxes.
FTC Bureau of Consumer Protection Director Samuel Levine criticized Hoyoverse's practices, stating that the company misled players, particularly children and teens, 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 deceptive "dark patterns."
The FTC's primary accusations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA) through the collection of personal information from children without parental consent and deceptive marketing practices targeting minors. The FTC also alleges that Hoyoverse misrepresented the odds of winning coveted "five-star" loot box prizes and the overall cost of obtaining them. The agency claims the game's virtual currency system was designed to be confusing and unfair, leading to substantial spending by players, including children who spent hundreds or even thousands of dollars.
As part of the settlement, besides the financial penalty and the ban on loot box sales to minors under 16, Hoyoverse must publicly disclose the odds of winning loot box prizes and the exchange rates for virtual currency. They are also required to delete the personal information of children under 13 and ensure future compliance with COPPA regulations.
