Take-Two Interactive Gets Coffee Break

The discovery of hidden, explicit sex scenes in Take-Two Interactive's (TTWO Quote) flagship game last year led to a costly recall, lawsuits and a plunge in the video game publisher's stock.

Apparently deciding that the company had suffered enough for the "Hot Coffee" fiasco, federal regulators announced on Wednesday that they're letting the company off with little more than a slap on the wrist.

Under a proposed settlement agreed to by Take-Two and the Federal Trade Commission, which was investigating allegations of deceptive advertising by the company related to the scandal, the company won't have to pay a fine and won't be forced to pull any products from the shelves, and none of the company's executives will face any personal penalties.

Instead, the company merely agreed to disclose on future product packages or advertisements any game content that wasn't taken into consideration by the game industry's ratings organization but which might have affected their rating. In other words, if a game has an explicit sex scene in it that, say, the Entertainment Software Rating Board didn't know about when it gave a game a "mature" rating, the company has agreed to disclose that information on the game box.

The company also agreed to take steps to make sure all relevant game content is considered by the ESRB when it is making ratings and will pay a fine of $11,000 per violation if it violates the agreement.

"Parents have the right to rely on the accuracy of the entertainment rating system," Lydia Parnes, director of the FTC's consumer protection bureau, said in a statement. "We allege that Take-Two and Rockstar's actions undermined the industry's own rating system and deceived consumers. This is a matter of serious concern to the commission."

FTC commissioners voted unanimously to approve the proposed settlement. The public now has 30 days to comment on it before the commission will decide to issue a final approval.