Chances of winning a "loot box" prize were exaggerated, FTC charged
of ConsumerAffairsThe maker of the video gameGenshin Impacthas agreed to pay $20 million and make changes to address allegations by the Federal Trade Commission (FTC) that the company violated childrens privacy laws and misled users about the costs of in-game purchases and the odds of winning rare prizes.
Genshin Impact deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning, said Samuel Levine, Director of the FTCs Bureau of Consumer Protection. Companies that deploy these dark-pattern tactics will be held accountable if they deceive players, particularly kids and teens, about the true costs of in-game transactions.
Key Allegations
- Privacy Violations: The company collected personal data from children under 13 without parental consent, violating the Childrens Online Privacy Protection Rule (COPPA).
- Misleading Purchases: Players, including children and teens, were misled about the cost and odds of obtaining rare five-star loot box prizes. The confusing virtual currency system made it hard to track spending.
- Unfair Marketing: Limited-time promotions and social media influencer campaigns created false impressions about the chances of winning rare items.
Proposed Settlement
- Parental Consent: Children under 16 will need parental approval for in-game purchases.
- Direct Purchases: Loot boxes must have a direct purchase option with real money.
- Transparency: The company must disclose loot box odds and virtual currency exchange rates.
- Privacy Compliance: Personal data collected from children under 13 must be deleted unless parental consent is obtained, and COPPA requirements must be followed.
The settlement awaits approval from a federal judge. The FTC emphasized that companies using deceptive tactics, especially those targeting children, will be held accountable.
Genshin Impact is produced by miHoYo Co., Ltd, a Shanghai-based, Chinese video game and development company
Photo Credit: Consumer Affairs News Department Images
Posted: 2025-01-21 20:57:23
