Cognosphere, the publisher of the globally popular anime-inspired RPG Genshin Impact, has agreed to pay $20 million to settle charges brought by the U.S. Federal Trade Commission (FTC). The charges stem from allegations that the company violated U.S. children’s privacy laws and engaged in unfair marketing practices.
FTC Allegations
The FTC accused Cognosphere, headquartered in Singapore, of improperly targeting children with predatory loot box mechanics. According to the allegations, the game obscured the real costs associated with these loot boxes and misled players about the odds of winning high-value prizes. Additionally, the FTC claimed the game failed to adequately protect the privacy of children under 16, violating the Children’s Online Privacy Protection Act (COPPA).
Settlement Terms
As part of the settlement agreement, Cognosphere has committed to the following measures:
- $20 Million Fine: A penalty to address the alleged violations.
- Parental Consent Measures: Children under 16 will be prohibited from making in-game purchases without explicit parental approval.
- Age-Gating Protections: Implementation of stricter age verification mechanisms and parental consent requirements.
- Improved Transparency: Enhanced disclosures regarding virtual currency and loot box rewards for U.S. players.
Cognosphere’s Response
In a public statement, Cognosphere responded to the settlement:
“While we disagree with many of the FTC’s allegations, we have chosen to resolve this matter to uphold the trust of our players. Transparency and player safety remain our highest priorities, and we are committed to implementing these changes in the coming months.”
This settlement serves as a reminder of the growing regulatory scrutiny around gaming practices, particularly those affecting children and young players. With Genshin Impact boasting a massive global player base, the changes resulting from this case could have wide-reaching implications for the gaming industry.
Source: Federal Trade Commission