Cognosphere Settles FTC Concerns with $20 Million Payment Over Genshin Impact Practices
The gaming firm will implement “new age verification and parental consent measures” as well as “in-game transparency regarding virtual currency” in response.
The distributor of Genshin Impact, Cognosphere, has consented to pay $20 million to settle allegations from the US Federal Trade Commission (FTC).
In a complaint submitted on January 17, 2025, to the United States District Court for the Central District of California, the FTC accused Cognosphere of breaching the Children’s Online Privacy Protection Act (COPPA) and misleading consumers about the costs associated with in-game purchases.
The FTC asserted that Cognosphere promoted Genshin Impact to children under 13 and collected personal data without obtaining parental consent, which is in violation of COPPA.
Furthermore, the agency claimed that Cognosphere “misled players regarding the likelihood of winning” rewards from loot boxes and contended that the process for acquiring in-game currency is overly complicated for consumers. This confusion supposedly misleads players about “the total amount of money that may need to be spent to obtain specific rewards.”
Under the proposed settlement, Cognosphere must adhere to changes specified in the complaint, including a ban on marketing loot boxes to minors under 16 without parental consent and correcting the misrepresentation of loot box odds, costs, and arrangements.
In response to the complaint, Cognosphere stated that although it believes “many of the FTC’s claims are inaccurate,” it chose to accept the settlement as it “values the trust of [its] community.”