Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Federal Trade Commission Announced on Friday Which Genshin Impact Developer Cognosphere has agreed to a $20 million settlement and several restrictions on how it sells its loot boxes and manages children’s personal data. According to the FTC, the company “actively marketed” its loot boxes to children and misled players about their odds of winning prizes.
Cognosphere also allegedly “deceived children and other users about the true costs of in-game transactions,” by requiring them to purchase virtual money involving multiple currency exchanges. Players often spend “hundreds of dollars on prizes they have little chance of winning,” according to Consumer Protection Bureau Director Samuel Levin. For years, loot boxes have been likened to A form of legal gambling.
The complaint filed by the Department of Justice also charges Genshin Impact Developer marketing to kids using tactics such as posts on social media channels and in-game banners. The company then allegedly collected their personal information in violation of the Children’s Online Privacy Protection Rule. Once the settlement is approved, the company must delete any data of children under 13 whose parents did not consent to the collection of their data.
Other requirements for leveling include that Cognosphere must offer an option to purchase loot boxes directly and not just through virtual money. Misrepresenting prices, features, and odds of winning loot boxes is also prohibited, and multi-level virtual currency exchange rates must be disclosed.