The settlement stems from the company's free and award-winning
mobile game "Bolt!" which came out in 2012 but is no longer listed in the iTunes store.
In the game, the fastest man alive, sprinter Usain Bolt
, picks up gold coins as he races across the screen. He runs faster and gains fuel if he hits a Gatorade icon, but he slows down and loses fuel if he hits a water droplet.
The opening instructions warn, "Keep your performance level high by avoiding water."
The complaint alleges that Gatorade violated California consumer protection laws by making misleading statements about water, according to Becerra's office.
"Making misleading statements is a violation of California law. But making misleading statements aimed at our children is beyond unlawful," Becerra said in a statement. "It's morally wrong and a betrayal of trust.
"Today's settlement should make clear that the California Department of Justice will pursue false advertisers and hold them accountable," he said. There was no admission of wrongdoing or liability by Gatorade as part of the settlement.
In addition to governing how the company depicts water, the settlement will require Gatorade to disclose endorser relationships in any social media posts. It will also prohibit the company from advertising its products in the media when children under 12 make up more than 35% of the audience.
Gatorade must pay $300,000 to the California Attorney General's Office, $120,000 of which will be used to fund research or education about the importance of drinking water and proper nutrition in kids and teenagers.
The Gatorade Company, a subsidiary of PepsiCo, did not immediately respond to a request for comment.
More than 2.3 million people downloaded the game, which was played 87 million times and "harnessed 4 million online fans," according to a 2013 presentation by marketing company Manning Gottlieb OMD. The company helped create the game and talked about its success after "Bolt!" won a marketing award.
says that "teen athletes often chose to drink water during practice because they thought it provided the proper hydration they needed, so we came up with an entertaining and competitive way to reinforce to teens that consuming Gatorade would help them perform better on the field and that water was the enemy of performance." The presentation has since been removed from the award site but was archived elsewhere.