Genshin Impact developer HoYoverse pays $20 million to settle "inaccurate" FTC child privacy and deception complaint
HoYoverse has settled a complaint filed by the Federal Trade Commission accusing the company of deceiving Genshin Impact players with false gacha costs and violating child privacy laws by collecting personal information from young players.
The details:
As announced by the FTC on January 17, a complaint was filed against Cognosphere, also known as HoYoverse, accusing the company of marketing Genshin Impact to children and collecting personal data from those under the age of 13, in violation of the Children's Online Privacy Protection Rule (COPPA). The FTC claims that the company knew it was collecting data from children but continued to share it with third parties without parental permission.
The complaint also alleges that HoYoverse misled players about the true cost of the prizes awarded through its "gacha" loot box system. The FTC considers the gacha system "complicated" as it requires players to "exchange real dollars for bundles of virtual currency that then have to be re-exchanged multiple times to open loot boxes."
It also claims that the process of purchasing gacha "pulls" to acquire new characters and weapons "misleads" customers about how much money they have spent and how much is required to obtain the item they desire. The FTC added that limited-time "Event Banners" and social media campaigns made it appear as though players had a better chance of acquiring five-star rated characters.
In response to the complaint, HoYoverse agreed to pay $20 million and delete all data retrieved from those under the age of 13. The company will also take additional steps to prevent children under the age of 16 from purchasing in-game loot boxes without parental permission, and it will not offer loot boxes that cannot be clearly purchased with real-world money.
The company has since denied the allegations (via Forbes), claiming that many of them are "inaccurate," and that it chose to settle the complaint as it "values the trust of our community and shares a commitment to transparency for our players." It stated that Genshin Impact is "designed for older teens and adults" and that it still intends to implement new safety measures for younger players as outlined in the settlement.
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