According to the FTC (Federal Trade Commission), Genshin Impact deceived minors, and the publisher has been banned from allowing them to purchase loot boxes.
The publisher of Genshin Impact, Cognosphere (another name for China’s HoYoverse), has agreed to pay a $20 million fine and prevent children under the age of 16 from making purchases in the game without parental consent as part of a settlement with the FTC for allegedly violating the Children’s Online Privacy Protection Act (COPPA) and misleading children and other users about the true cost of in-game transactions and the chances of winning rare prizes. Although Cognosphere has accepted the fine, the company says that many of the FTC’s allegations are inaccurate.
The complaint, filed by the U.S. Department of Justice, alleged that Cognosphere actively marketed Genshin Impact to and collected personal information from children in violation of COPPA, misled players about the odds and cost of obtaining items from loot boxes, and used a difficult and confusing shopping system that misled consumers about the amount of money players consistently spent on loot boxes and how much players would likely need to spend to obtain certain prizes.
“Genshin Impact tricked children, teens, and other players into spending hundreds of dollars on prizes they had little chance of winning. Companies that use these deceptive tactics will be held accountable when they mislead gamers, especially children and teens, about the true cost of in-game transactions,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
A dark pattern (or dark design) refers to elements of the user interface that are intentionally designed to be deceptive, typically with the goal of unintentionally misleading users and thus, in most cases, inducing them to make a purchase. This has become a growing problem in the gaming industry: in 2022, Epic Games reached a $520 million settlement with the FTC over a complaint regarding the alleged use of dark patterns in Fortnite. These dark patterns also exist in the wider world: in 2023, for example, the FTC filed a complaint against Amazon for using manipulative, coercive, or deceptive user interfaces, known as dark patterns, to trick consumers into automatically renewing Prime memberships.
A federal judge has yet to approve a settlement under which Cognosphere will pay a $20 million fine and make the following changes to Genshin Impact prohibit children under the age of 16 from purchasing loot boxes without parental consent; make all loot boxes that can be purchased with virtual currency available for direct purchase with real money; accurately disclose and not misrepresent loot box odds and exchange rates for multi-tiered virtual currency; delete all personal information collected from players under the age of 13 unless parental consent is obtained to retain the information; and comply with all COPPA regulations, including its notice and consent requirements.
Cognosphere said in a statement, “Genshin Impact is a popular free-to-play anime-style game 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. As part of the agreement, in the coming months we will implement new age rating and parental consent protections for children and teens, as well as expand our in-game disclosures about virtual currency and rewards for U.S. players.”
$20 million is pocket change to them.
Source: PCGamer, FTC, Cognosphere
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