The Federal Trade Commission announced that Cognosphere, developer of Genshin Impact, agreed to a $20 million settlement for misleading marketing of loot boxes and improper handling of children's data.
Cognosphere allegedly deceived children and users about the real costs of in-game transactions, which led players to spend hundreds on prizes they had little chance of winning.
The settlement requires Cognosphere to delete personal data of children under 13 without parental consent and to ensure the transparency of loot box pricing and odds.
For the first time, the FTC is imposing stringent rules on a gaming company, marking a significant step in regulating loot boxes and the protection of children’s privacy.
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