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 states that Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. This follows allegations that the company misled players, particularly children and teens, about the odds of winning valuable in-game items ("five-star" prizes) through loot boxes, leading to significant, often unexpected, financial expenditures.
FTC Bureau of Consumer Protection Director Samuel Levine criticized Hoyoverse's practices, stating that the company's deceptive tactics led players to spend hundreds of dollars with minimal chances of winning. He emphasized that companies employing such "dark patterns" will face consequences.
The FTC's complaint alleges violations of the Children's Online Privacy Protection Rule (COPPA) due to the collection of personal information from children without parental consent, and deceptive marketing practices related to loot box odds and virtual currency exchange rates. The FTC contends that the game's system obscured the true cost of obtaining "five-star prizes," resulting in substantial spending by children.
In addition to the financial penalty and the sales restriction, the settlement mandates that Hoyoverse: disclose the odds of winning loot boxes; delete personal data collected from children under 13; and ensure future compliance with COPPA regulations.
