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. The FTC's press release states Hoyoverse will also block in-app purchases for those under 16 without parental consent.
FTC Bureau of Consumer Protection Director Samuel Levine stated that Genshin Impact misled children, teens, and other players into spending significant sums on prizes with low win probabilities, adding that companies employing such deceptive practices will face consequences.
The FTC alleges Hoyoverse violated the Children's Online Privacy Protection Rule (COPPA) by marketing to children and collecting their personal information. Further accusations include deceiving players about the odds of winning "five-star" loot box prizes and the actual cost of obtaining them. The FTC contends Genshin Impact's virtual currency system was confusing and unfair, obscuring the high cost of acquiring "five-star prizes" and leading children to spend hundreds or thousands of dollars.
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 COPPA compliance.
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