Cognosphere, the distributor and developer of the popular game Genshin Impact, has agreed to a $20 million settlement with the Federal Trade Commission (FTC). The settlement resolves allegations that the company violated the Children’s Online Privacy Protection Act (COPPA) and engaged in misleading practices related to in-game transactions and the odds of winning loot box prizes.
The FTC’s complaint accused Cognosphere of marketing loot boxes to children and not being transparent about the costs and odds associated with in-game purchases. The company allegedly collected personal data from children under 13 without obtaining proper parental consent, which is a requirement under COPPA.
As part of the settlement, Cognosphere, also known as HoYoverse in the United States, has committed to implementing new measures to enhance transparency and ensure compliance with federal regulations. Key measures include:
<ul>
<li>Establishing age-gate mechanisms to prevent children under 16 from purchasing loot boxes without parental consent.</li>
<li>Clearly disclosing the costs and odds associated with virtual currency and loot boxes.</li>
<li>Obtaining verifiable parental consent before collecting personal data from children under the age of 13.</li>
<li>Preventing further misrepresentation of in-game transaction costs and loot box odds.</li>
</ul>
These steps are aimed at protecting young users and providing a clearer understanding of in-game purchases to all players. Cognosphere’s agreement to these terms reflects a significant effort to address the concerns raised by the FTC and to promote a fairer gaming environment.

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Cognosphere, the developer of Genshin Impact, has agreed to a $20 million settlement with the FTC for violating COPPA and misleading in-game transaction practices. The settlement includes measures to enhance transparency and ensure compliance, such as establishing age-gate mechanisms, clearly disclosing costs and odds, obtaining parental consent for data collection from children under 13, and preventing misrepresentation of in-game transaction costs.

Cognosphere to Pay $20 Million to Settle FTC Complaint on Genshin Impact