Genshin Impact publisher Hoyoverse has reached a significant settlement with the United States Federal Trade Commission (FTC), agreeing to a $20 million fine and a ban on selling loot boxes to teenagers under the age of 16. In a press release, the FTC announced that Hoyoverse, the creators of Genshin Impact, will "pay $20 million and block children under 16 from making in-game purchases without parental consent" as part of this settlement.
Samuel Levine, Director of the FTC's Bureau of Consumer Protection, stated that Genshin Impact had "deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning." Levine emphasized that companies employing "these dark-pattern tactics will be held accountable," particularly when they target young children and teens.
The FTC's main allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA). They claim that Hoyoverse marketed Genshin Impact to children and collected their personal information without proper consent. Additionally, the FTC alleges that Hoyoverse deceived players regarding the odds of winning "five-star" loot box prizes and the costs associated with opening these loot boxes.
The FTC further criticized Genshin Impact's virtual currency system, describing it as confusing and unfair. They argue that the system obscures the true cost players will incur to obtain "five-star prizes," leading to children spending hundreds to thousands of dollars in pursuit of these rewards.
As part of the settlement, Hoyoverse is not only facing the fine and the ban but is also required to disclose loot box odds and exchange rates for its virtual currency. They must delete personal information collected from children under the age of 13 and ensure compliance with COPPA rules moving forward.
