Genshin Impact's operator Cognosphere agrees to pay over 3 billion yen in settlement over misrepresentation of gacha users and handling of personal information of minors under 13
Cognosphere, known for the open-world RPG 'Genshin Impact,' was accused by the Federal Trade Commission (FTC) of violating children's privacy protections and making misleading claims about gacha. The company has agreed to pay $20 million (approximately 3.1 billion yen) to settle and to prohibit users under the age of 16 from making in-game purchases without parental consent.
Genshin Impact Game Developer Will be Banned from Selling Lootboxes to Teens Under 16 without Parental Consent, Pay a $20 Million Fine to Settle FTC Charges | Federal Trade Commission
Video Game Maker Paying $20 Million in FTC Kid-Privacy Case - Bloomberg
FTC cracks down on Genshin Impact gacha loot box practices
https://www.bleepingcomputer.com/news/gaming/ftc-cracks-down-on-genshin-impact-gacha-loot-box-practices/
According to the lawsuit, Cognosphere actively marketed Genshin Impact to children, collecting their personal information and violating the Children's Online Privacy Protection Act (COPPA).
COPPA requires that online services or websites targeting children under the age of 13 must provide parental notice about any personal information they collect and obtain verifiable parental consent before using that information.
However, miHoYo (HoYoverse), the developer of Genshin Impact, and its subsidiary Cognosphere, which operates the game, knowingly collected and used personal information from children under the age of 13 without obtaining parental consent or complying with COPPA requirements.
Genshin Impact also introduces a gacha system called 'prayers' to obtain characters and weapons, and to spin the gacha, you consume 'Encounters' or 'Woven Fates.' You can obtain 'Encounters' and 'Woven Fates' through gameplay, or by exchanging them for 'Ore' that can also be obtained through gameplay, or by purchasing Ore with paid 'Crystallization,' which can then be converted into 'Encounters' and 'Woven Fates.'
In this way, the complex system used to spin the gacha makes it difficult to understand how much money is actually needed to acquire a 5-star character or weapon, which is causing confusion. Furthermore, it has been pointed out that 5-star characters and weapons can only be acquired through a limited-time 'prayer,' and that this fact is being promoted through in-game banners and 'gacha videos' by influencers.
In response to the lawsuit, Cognosphere paid $20 million to settle and announced plans to make changes to address the allegations.
Cognosphere is being asked to:
- Prohibit children under the age of 16 from purchasing loot boxes (known as 'prayers' in Genshin Impact) without explicit parental consent.
Prohibition on selling loot boxes for virtual currency without offering consumers the option to purchase them directly with real money
- Providing false representations about the probability, price, or features of loot boxes is prohibited.
Disclose loot box odds and multi-tiered cryptocurrency rates
・Personal information collected from children under the age of 13 will be deleted unless parental consent is obtained.
Complying with COPPA, including its notice and consent requirements
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in Game, Posted by logc_nt