The United States Federal Trade Commission filed a complaint last week alleging that Cognosphere, which publishes parent company MiHoYo’s games like Genshin Impact and Zenless Zone Zero in the US, violated the 2000 Children's Online Privacy Protection Act Collecting children's personal info and misrepresenting loot boxes. The company has settled with the FTC for $20 million and promises to age gate and further extend parental consent protections.
The complaint accused the company of violating COPPA, in Genshin Impact, including allegations of collecting personal info of players under 13, which is illegal under the law, as well as misrepresenting odds, and not being transparent about currencies and how much it might take in purchases to get the desired outcomes. They say cases where children and teenagers have spent “hundreds or thousands of dollars” for a chance at offered prizes.
“Defendants have misrepresented players’ odds of obtaining rare loot box prizes, and Defendants have misled players about the substantial expenditure likely required to obtain these prizes,” the filing reads. They’re also accused of promoting to children iimproperly, including in ways that hide the real odds of getting featured items.
For those of us who have been around for the lootbox discussions and debates over time, These types of accusations are pretty common and most of us have seen them before. Both lootboxes and gacha mechanics continue to be debated, with regulation attempts in various countries.
Cognosphere has chosen to enter into a settlement deal with the FTC. In a statement released via HoYoverse, Cognosphere says, “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”.
They agreed to take certain actions to tighten up privacy and to age-gate some features. The changes will take time to implement:
“Under the agreement, we will introduce new age-gate and parental consent protections for children and young teens and increase our in-game disclosures around virtual currency and rewards for players in the U.S. in the coming months."