federal trade commission announced on friday He genshin impact Developer Cognosphere has agreed to a $20 million settlement and a number of restrictions on how it sells its loot boxes and handles children's personal data. According to the FTC, the company “actively marketed” its loot boxes to children and misled players about their chances of winning prizes.
Cognosphere allegedly “deceived children and other users about the real costs of in-game transactions”, requiring them to purchase virtual money which involved multiple currency exchanges. According to Samuel Levin, director of the Bureau of Consumer Protection, players often spend “hundreds of dollars on prizes they have little chance of winning”. Loot boxes have been compared over the years a form of legal gambling,
The complaint filed by the Justice Department also alleges genshin impact Marketing developers to children using methods such as posts on social media channels and in-game banners. The company then allegedly collected personal information of children in violation of online privacy protection rules. Once the settlement is approved, the company will have to delete any data of children under 13 whose parents have not given consent for their data to be collected.
Other requirements of the settlement include that Cognosphere must provide the option to purchase loot boxes directly, and not solely through virtual money. It is also prohibited from misrepresenting pricing, features and winning odds for loot boxes, and it must disclose exchange rates for multi-tier virtual currency.