Hoyoverse, the publisher of the popular mobile game Genshin Impact, has reached a $18 million settlement with the Federal Trade Commission (FTC). The settlement resolves allegations that Hoyoverse violated the Children's Online Privacy Protection Act (COPPA) and engaged in deceptive practices regarding in-game purchases.
The FTC's press release details the settlement, stating that Hoyoverse will pay a $18 million fine and implement changes to its in-app purchasing system. Specifically, the company will prohibit in-game purchases by users under 16 without parental consent.
Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's practices, alleging that the company misled players, particularly children and teens, into spending significant sums on in-game items with low odds of acquisition. He emphasized the FTC's commitment to holding companies accountable for employing deceptive tactics.
The FTC's complaint centered on several key issues: violation of COPPA through the collection of children's personal information, deceptive marketing targeting children, misrepresentation of the odds of winning "five-star" loot box prizes, and the obfuscation of the true cost of obtaining these prizes. The FTC argued that Genshin Impact's virtual currency system was designed to be confusing and unfair, leading to substantial spending by young players.
As part of the settlement, beyond the financial penalty and the restriction on underage purchases, Hoyoverse is mandated to: clearly disclose the odds of winning loot box prizes and the exchange rates for virtual currency; delete personal information collected from children under 13; and ensure future compliance with COPPA regulations. This settlement underscores the FTC's ongoing efforts to protect children and ensure transparency in the gaming industry's in-app purchasing practices.
