Genshin Impact Developer Agrees to $20M Fine Over Loot Box Violations
Genshin Impact developer Hoyoverse has settled with the Federal Trade Commission (FTC), agreeing to a $20 million fine and a ban on selling loot boxes to children under 16 without parental consent. The FTC's press release states Hoyoverse will implement changes to prevent underage in-app purchases.
Samuel Levine, Director of the FTC's Bureau of Consumer Protection, stated that Hoyoverse's practices deceived players, particularly children and teens, into spending significant sums on in-game prizes with low winning odds. He emphasized the FTC's commitment to holding companies accountable for using deceptive tactics.
The FTC's allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA) through marketing to children and collecting their personal information without consent. They also allege Hoyoverse misled players about the odds of obtaining "five-star" loot box prizes and the overall cost.
The FTC contends Genshin Impact's virtual currency system was confusing and unfair, obscuring the high cost of acquiring "five-star prizes" and leading to substantial spending by children.
In addition to the fine and sales restriction, Hoyoverse must disclose loot box odds and virtual currency exchange rates, delete personal information collected from children under 13, and ensure future compliance with COPPA regulations.
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