As mentioned in Part I of the this three part blog post on the FTC’s complaint against HoYoverse and Genshin Impact, COPPA applies to sites and services that are either directed toward children under the age of 13 or have actual knowledge that children 13 are providing information online. In Count I of the complaint, the FTC argues that both were the case. Therefore, Genshin Impact was subject to COPPA requirements and HoYoverse’s failure to have the appropriate disclosures, obtain parental consent, have proper age-gates, and address other requirements was a violation of COPPA.

In Part II of this blog post series, we will examine what factors the FTC considers when determining whether a site or online service provider is directed towards children or has actual children.

Directed Towards Children

COPPA applies to sites and services that are directed toward children under the age of 13. To determine whether a site or online service provider is directed towards children, the FTC considers the following factors: (i) subject matter, (ii) visual content, (iii) use of animated characters or child-oriented activities and incentives, (iv) music or other audio content, (v) age of models, (vi) presence of child celebrities or celebrities who appeal to children, (vii) language or other characteristics of the Web site or online service, (viii) whether advertising promoting or appearing on the site or online service is directed to children, and (ix) competent and reliable empirical evidence regarding audience composition, and evidence regarding the intended audience.

Here, the FTC argued that Genshin Impact’s gameplay, subject matter, and art style were similar to other games popular with children. Notably, it mentioned the stylized fantasy combat with no blood or gore, anime-style graphics, and child-like characters including Paimon – an NPC serving as the player’s guide and as the game’s mascot.

Some may argue that the idea that these factors mainly target children are outdated. Anime is widely popular among Millennials and Gen Z, the vast majority of which are now over the age of 18, and plenty of games with fantasy style combat and little to no gore simultaneously have mature humor, themes, and characters. HoYoverse itself stated that it mainly targeted young adults and older teenagers.^[1]

However, factors such as having an animated style or child characters are enshrined in the COPPA Rule under 16 C.F.R.§ 312.2. Until such factors are removed from the actual COPPA rule, the FTC can continue to rely on such factors in determining whether a game, service, or site is directed towards children.

One unique factor worth discussing here is the “presence of child celebrities or celebrities who appeal to children”. One piece of evidence that the FTC cited was HoYoverse’s wide use of influencers who were either popular with or even directly appealed to children. The FTC pointed towards the fact that HoYoverse engaged several influencers that were known for their content on other games that primarily targeted children such as Minecraft and Roblox. Some of the influencers had even won awards for children’s entertainment such as the Nickelodeon Kids’ Choice Awards.

This isn’t the first time that these factors have been discussed by the FTC. In the 2022 complaint against Epic Games’s Fortnite, the FTC cited the fact that Fortnite sold merchandise targeted at children such as toys, backpacks, and costumes.^[2]

Essentially, the FTC will consider the totality of the brand when determining whether it is targeted at children including any promotional activities, merchandise, and more.

Actual Knowledge

Even if a site or service is not directed towards children under the age of 13, a site or online service provider is subject to COPPA if they have actual knowledge that children 13 are providing information online. Here, the fact pattern is fairly straightforward. HoYoverse maintains a social networking service called HoYoLAB which is presented as a forum for players. This is promoted more than a typical game community forum. Players receive rewards from logging on to and participating in the forums. While maintaining the forums, HoYoverse had become aware of posts by children under 13 years old. Although HoYoverse would take some corrective action by removing the posts and muting those players, the FTC noted that HoYoverse did not seek parental consent for the use or disclosure of personal information it already collected nor did HoYoverse delete such information.

Lessons on COPPA Factors and Compliance

Consider the Activities of the Brand as a Whole – Not Just the Website or Service. We can see that COPPA may apply to online service providers even if they do not intentionally target children and teenagers. The FTC’s analysis will focus on a brand as a whole, including the brand’s ancillary products, merchandise, advertising activity and more.

Balancing the Cost of Modifying the Service versus Pre-Emptive COPPA Compliance. When determining whether a service is directed towards children or teenagers, certain factors such as the use of child characters or influencers popular with children might be avoidable. Other factors such as using an animated style may be too impractical for online service providers to pivot from. If it is too burdensome for online service providers to avoid the above factors, then they should consider implementing pre-emptive measures to comply with COPPA such as having an age-gate, parental consent mechanism, and ensuring that they do not collect more information than necessary from children.

Consider Tailoring Content Guidelines for Promotional Campaigns. When hiring influencers for promotional campaigns, online service providers will want to consider the type of content such influencers typically create and the demographics of their audiences. When engaging creators and influencers, online service providers and marketing agencies will typically provide a “campaign brief” that gives guidelines on the type of content that influencers should create for a promotional campaign. Guidelines usually include prohibitions on explicit speech and conduct, using certain logos and brands, and disclosure placements. Games trying to avoid being subject to COPPA may want to additionally consider guidelines steering influencers away from “child-oriented activities.”

Policing Actual Participation by Children. Online service providers must also be vigilant of policing actual participation of children or teenagers in their services. If actual participation is discovered, they must actively work to obtain parental consent or delete the personal information of such minors.

^[1]https://www.hoyoverse.com/en-us/news/127581

^[2]https://www.ftc.gov/news-events/news/press-releases/2022/12/fortnite-video-game-maker-epic-games-pay-more-half-billion-dollars-over-ftc-allegations