FTC Takes on Genshin Impact | Loot Boxes, Dark Patterns, and Legal Showdowns

Virtual Legality

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In this episode, Richard Hoeg examines the FTC's lawsuit against Genshin Impact, focusing on loot boxes and transparency. He discusses the FTC's charges, including concerns over "dark pattern tactics" and COPPA compliance, and the implications for free-to-play games. The episode explores Hoyoverse's business practices, misleading loot box disclosures, and the FTC's authority under sections 5 and 6g. Richard also addresses marketing to children, settlement terms, and the broader impact on the gaming industry, concluding with a look at internal FTC debates.

FTC ACTION https://www.ftc.gov/news-events/news/press-releases/2025/01/genshin-impact-game-developer-will-be-banned-selling-lootboxes-teens-under-16-without-parental https://www.ftc.gov/system/files/ftc_gov/pdf/cognosphere_complaint.pdf

LAWS https://www.ecfr.gov/current/title-16/chapter-I/subchapter-C/part-312 https://www.law.cornell.edu/uscode/text/15/45 https://uscode.house.gov/view.xhtml?hl=false&edition=prelim&req=granuleid%3AUSC-prelim-title15-section46

CONTROVERSY/AUTHORITY https://crsreports.congress.gov/product/pdf/LSB/LSB10635 https://businesslaw.osbar.org/2024/12/31/federal-trade-commission-non-compete-ban-december-2024-update/ https://www.beckersasc.com/asc-news/trump-administration-likely-to-end-ftc-efforts-to-ban-noncompetes-report.html https://www.econotimes.com/Lina-Khan-Resigns-as-FTC-Chair-Amid-Antitrust-Legacy-1699716 https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-cognosphere-concurrence.pdf

(0:00) Introduction to the episode (0:46) FTC lawsuit against Genshin Impact and loot boxes (3:14) FTC's charges against Genshin Impact and transparency issues (5:25) FTC's concerns with "dark pattern tactics" and COPPA requirements (7:57) Implications for free-to-play games and FTC enforcement (10:34) Jurisdiction and legal basis for FTC's case against Genshin Impact (16:50) Specifics of COPPA rule and FTC's interpretation (20:05) Broader implications for the gaming industry and age gates (24:29) FTC's investigation into Hoyoverse's business practices (31:38) Currency and loot box practices in Genshin Impact (37:14) Hoyoverse's advertising and influencer collaborations (39:48) Misleading disclosure of loot box odds and unfair practices (47:31) Gaming business models and FTC's focus on children (51:22) FTC's authority and rulemaking under section 5 and 6g (55:50) Settlement terms and broader video game industry implications (1:00:00) Major questions doctrine and anti-delegation concerns (1:03:36) FTC and loot boxes, plus ban on noncompetes (1:05:43) Andrew Ferguson's role and allegations against Cognosphere LLC (1:07:26) Loot boxes, odds, and misleading advertising (1:09:46) Virtual currency complexity and FTC's consumer protection stance (1:12:21) Marketing to children and differing opinions within FTC (1:14:23) Conclusion, viewer engagement, and disclaimer

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