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 sent warning letters to 12 companies offering 'nudify' tools that generate nonconsensual intimate images, for failing to comply with the TAKE IT DOWN Act (TIDA) by not providing a mechanism for victims to request removal of such content. The letters urge immediate compliance with TIDA, which requires platforms to remove nonconsensual intimate images within 48 hours of a valid request. Noncompliant companies may face future legal action and civil penalties of up to $53,088 per violation.
The FTC began enforcing the TAKE IT DOWN Act on May 19, 2026, a law requiring covered platforms to establish a process for victims to request removal of nonconsensual intimate images and delete such content within 48 hours of a valid request. The agency launched a consumer complaint portal, issued compliance guidance for businesses and consumers, and sent reminder letters to major platforms including Meta, TikTok, and X about their obligations under the law. No specific penalties or enforcement actions against individual companies were announced in this release.
$6.5M
A federal court held Cliq Inc. and its executives Andrew Phillips and John Blaugrund in civil contempt for multiple violations of a 2015 FTC order requiring the payment processor to prevent enabling consumer fraud. The court found the defendants facilitated fraud by processing transactions for high-risk merchants, avoiding fraud monitoring, failing to conduct required underwriting, and ignoring chargeback thresholds. The court imposed $6.5 million in civil contempt sanctions against the defendants.
$795.8M
The FTC and State of Nevada settled charges with lead defendants of the IM Mastery Academy MLM scheme, including Chris and Isis Terry and their affiliated companies, over false earnings claims used to promote financial training programs and a multi-level marketing venture. The stipulated order imposes a $795.8 million judgment, with defendants surrendering nearly $90 million in assets including luxury real estate, vehicles, jewelry, and a yacht, totaling over $100 million with prior judgments from other involved defendants. The order also bans defendants from selling trading-training services, prohibits false earnings claims, and restricts deceptive practices including negative-option misrepresentations and telemarketing violations.
The FTC and State of Illinois, via the Department of Justice, filed a complaint against B.E.S.T. GDR LLC (d/b/a Premium Home Service) and its owner Yosef Bernath for creating thousands of fake home repair business listings with fabricated five-star reviews to deceive consumers. The defendants allegedly routed consumer calls to unqualified representatives, arranged for unlicensed technicians, and violated the FTC Act, Reviews and Testimonials Rule, Gramm-Leach-Bliley Act, and Illinois consumer protection laws. No monetary penalty has been imposed yet as the case is in initial filing stages.
Federal Trade Commission Chairman Andrew N. Ferguson sent letters to over a dozen major technology companies reminding them of their obligation to comply with the Take It Down Act (TIDA) by May 19, 2026. TIDA requires covered platforms to establish a process for victims, including children, to request removal of nonconsensual intimate images, with takedown of content and all identical copies required within 48 hours of a valid request. The FTC also issued supplemental guidance to help companies prepare for compliance and warned that it will monitor and enforce violations of the law.