Genshin Impact Developer Responds To $20 Million FTC Fine And Lootbox Ban
Genshin Impact developer and distributor HoYoverse through its subsidiary Cognosphere issued a statement in response to the FTC fining the company $20 million and banning it from selling lootboxes to children under 16 without parental consent.
In a press release on January 17th, the FTC stated, “The maker of the video game Genshin Impact has agreed to pay $20 million and to block children under 16 from making in-game purchases without parental consent to settle Federal Trade Commission allegations the company violated a children’s privacy law and deceived children and other users about the real costs of in-game transactions and odds of obtaining rare prizes.”
Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection stated, “Genshin Impact deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning.”
He added, “Companies that deploy these dark-pattern tactics will be held accountable if they deceive players, particularly kids and teens, about the true costs of in-game transactions.”
READ: Sweet Baby Inc. Infected Reflector Entertainment Admits Unknown 9: Awakening Was A "Failure"
This agreement came after a complaint filed by the U.S. Department of Justice charged that HoyoVerse “actively marketed Genshin Impact to children and collected personal information from them in violation of the Children’s Online Privacy Protection Rule (COPPA).”
The complaint also “charged that HoYoverse deceived players about the odds of winning particular sought-after ‘five-star’ loot box prizes and how much it would cost to open loot boxes to win the prizes.”
Finally, the complaint also claimed that HoYoverse’s promotional tactics for the loot boxes “were unfair to children and teenagers.”
Specifically regarding the violations of COPPA, the press release detailed that “Genshin Impact is a child-directed online service that collects personal information from children under 13 and therefore is required by COPPA to notify parents about the information they collect from children and to obtain their consent for the collection of that personal data.”
HoYoverse collected this information and failed to obtain parental consent and did not comply with other COPPA requirements. Furthermore, the press release alleges that “HoYoverse shared with third-party analytics firms and advertisers user IDs as well as device-related persistent identifiers to track players’ progress, purchases, settings, and friends lists, according to the complaint.”
Specifically the press release notes that upon approval of a federal judge that HoYoverse must pay a $20 million fine and that it will be:
Prohibited from allowing children under 16 to purchase loot boxes in their video games without a parent’s affirmative express consent;
Prohibited from selling loot boxes using virtual currency without providing an option for consumers to purchase them directly with real money;
Prohibited from misrepresenting loot box odds, prices and features;
Required to disclose loot box odds and exchange rates for multi-tiered virtual currency;
Required to delete any personal information previously collected from children under 13 unless they obtain parental consent to retain such data; and
Required to comply with COPPA including its notice and consent requirements.
In response to this Cognosphere stated it plans “to strengthen and increase transparency around our parental consent and virtual currency practices.”
The company added, “Animation-style games and shows are well-received by global audiences and players across various ages. Genshin Impact is a popular free-to-play, anime-style game designed for older teens and adults. While we believe many of the FTC's allegations are inaccurate, we agreed to this settlement because we value the trust of our community and share a commitment to transparency for our players.”
“Under the agreement, we will introduce new age-gate and parental consent protections for children and young teens and increase our in-game disclosures around virtual currency and rewards for players in the U.S. in the coming months,” the company concluded.
What do you make of this statement from HoYoverse?
I really can't believe Hoyoverse have the absolute nerve to say the allegations towards them is false, here's a bit of information Techtone pulling for the staff of homa for Huo Tao, he spent 1200 dollars trying to get that staff because the banner was rigged so anyone trying to pull on that banner had no chance of getting the weapon, it was a SPENDING TRAP period, Hoyoverse is truly guilty of everything they are accused of doing this can also be said for the pulling of characters you're not going to ever get the 5 star your pulling for unless your spending hundreds of dollars