Penalty Amount
$20,000,000
The FTC settled with Cognosphere LLC, developer of Genshin Impact, for violating COPPA by collecting personal information from children without parental consent and for deceptive practices regarding in-game loot box purchases. The company will pay $20 million in penalties and is banned from selling loot boxes to children under 16 without verifiable parental consent.
Cognosphere LLC must pay $20 million in civil penalties, is permanently enjoined from selling loot boxes to children under 16 without verifiable parental consent, and must implement a comprehensive privacy program to comply with COPPA.
In-house legal teams should review all customer-facing agreements (Terms of Service, End User License Agreements), vendor contracts involving data processing or analytics for child-directed services, and any data processing addendums. Specific clauses to scrutinize include those governing consent mechanisms (especially for users under 13 and 13-16), data collection from minors, in-game purchase and loot box mechanics, disclosure of odds for virtual items, and age verification procedures. Changes will likely be needed to implement robust, verifiable parental consent flows, restrict or prohibit loot box purchases for users under 16, provide clear and conspicuous odds disclosures, and establish enforceable age-gating and transaction limit systems to comply with COPPA and prevent deceptive practices.
Entity
COGNOSPHERE LLC
Also known as: Cognosphere
Industry
GamingOfficial Press Release
https://www.ftc.gov/legal-library/browse/cases-proceedings/222-3152-cognosphere-llc-us-v
cognosphere complaint
https://www.ftc.gov/system/files/ftc_gov/pdf/cognosphere_complaint.pdf
cognosphere stiporder
https://www.ftc.gov/system/files/ftc_gov/pdf/cognosphere_stiporder.pdf
Cognosphere Attachment3 2
https://www.ftc.gov/system/files/ftc_gov/pdf/Cognosphere-Attachment3-2.pdf
Cognosphere Attachment3 3
https://www.ftc.gov/system/files/ftc_gov/pdf/Cognosphere-Attachment3-3.pdf
Cognosphere Attachment3 4
https://www.ftc.gov/system/files/ftc_gov/pdf/Cognosphere-Attachment3-4.pdf
cognospherea
https://www.ftc.gov/system/files/ftc_gov/pdf/cognospherea.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"COGNOSPHERE LLC"
"$20 million"
"Children's Online Privacy Protection Act (COPPA)"
"violated a children’s privacy law and deceived children and other users about the real costs of in-game transactions and odds of obtaining rare prizes."
The FTC rescinded its 2021 Policy Statement on Breaches by Health Apps and Other Connected Devices, which had purported to apply the Health Breach Notification Rule to health apps and connected devices that collect consumer health information. The rescission follows the Commission's 2024 update to the Health Breach Notification Rule, which already covers health apps and connected devices like fitness trackers, and implements an executive order directing agencies to eliminate obsolete guidance documents. No company was charged or penalized; this is a deregulatory action.
$12.0M
The FTC alleged that payment processor Humboldt Merchant Services knowingly processed payments for more than 1,000 shell merchant entities serving as fronts for fraudulent companies engaged in unauthorized billing scams, despite red flags including chargeback rates nearly 10 times higher than card-brand thresholds. Under the proposed stipulated order filed in the U.S. District Court for the Eastern District of Michigan, Humboldt will pay $12 million for consumer redress and is permanently banned from processing payments for merchants with a heightened risk of potential fraud.
$4.8M
The FTC charged Canada-based payment processor Nuvei Corporation and its subsidiaries with knowingly processing payments for fraudulent merchants, including more than $30 million in payments for the Reimage tech support scam from 2017 to 2023, as well as merchants making false earnings claims and impersonating government tax authorities. Under the stipulated order filed in the U.S. District Court for the District of Arizona, Nuvei will pay $4.85 million for consumer redress, is banned from serving tech support telemarketers, and must implement robust merchant screening and chargeback monitoring practices. Note: this is a payments-fraud facilitation action under the FTC Act and Telemarketing Sales Rule, not a data privacy violation.
The FTC announced a seven-day extension of the public comment period on its proposed enforcement policy statement regarding personalized pricing, pushing the deadline from Sept. 18, 2026 to Sept. 25, 2026. Personalized pricing refers to using personal data to set prices based on what the company believes an individual consumer is willing to spend. This is a procedural announcement about draft agency guidance, not an enforcement action against any company, and no entity was named, no violation found, and no penalty imposed.
Colorado Attorney General Phil Weiser joined the FTC and 22 state attorneys general in filing a lawsuit against Amazon for manipulating the auctions used to set advertising prices, replacing actual auction results with higher prices since 2019 and overcharging nearly 1.2 million U.S. advertising customers. The FTC estimates total improper surcharges from 2018 to 2026 exceed $20 billion, with costs ultimately passed to shoppers through higher prices. The states seek a permanent injunction and monetary relief; no penalty has been imposed yet as this is a newly filed complaint.
$930K
The FTC finalized orders requiring CMG Media Corporation (doing business as Cox Media Group), MindSift LLC, and 1010 Digital Works LLC to pay a total of $930,000 for falsely claiming they offered an AI-powered service that could target ads based on conversations captured from consumers' smart devices, and that consumers had opted into such targeting. The orders also prohibit the companies from making misrepresentations about their advertising services, voice data collection, and consumer consent.