United States of America: FTC and DoJ issued proposed order in lawsuit against Cognosphere (owner of Genshin impact) over alleged deceptive practices related to the sale of lootboxes

On 17 January 2025, the Federal Trade Commission (FTC) and the Department of Justice (DoJ) issued a proposed order requiring Cognosphere Pte. Ltd and Cognosphere LLC (Cognosphere), makers of the video game Genshin Impact, to pay USD 20 million and address deceptive practices related to in-game loot boxes. The FTC and the DoJ found that the company misled players, including children and teens, about the costs and odds of obtaining sought-after prizes, using a confusing virtual currency system and promotional tactics that obscured the actual expense of loot boxes. The proposed order prohibits misrepresentation of loot box odds and pricing, requires transparent disclosure of odds and exchange rates, and bans the sale of loot boxes using virtual currency unless a direct payment option is provided. The order also restricts players under 16 from purchasing loot boxes without parental consent. Federal judicial approval is required for the order to take effect.