Epic to pay $520 million to settle FTC charges on Fortnite
Game maker will pay $275 million for violating children's privacy law and $245 million "for tricking users into making unwanted charges"
Epic Games will pay more than half a billion dollars to settle charges from the US Federal Trade Commission, the agency announced today.
According to the FTC, Epic will pay $275 million for violating the Children's Online Privacy Protection Act (COPPA) and another $245 million for design relying on dark patterns "to dupe millions of players into making unintentional purchases."
The privacy violations included collecting personal information from children under 13 without parental consent or notification, as well as enabling voice and text chat for children and teens by default.
The FTC noted that Epic employees had pushed for the company to make voice and text chat an opt-in feature as early as 2017, but Epic dragged its heels on making a change despite reports of children being harassed and sexually harassed while playing the game. When it added a button to turn voice chat off, the FTC said Epic made it hard for users to find.
As for the dark patterns complaint, the FTC pointed to "counterintuitive, inconsistent, and confusing button configuration" and single-button purchases that meant users could accidentally buy something when trying to wake the game from sleep mode or while on a loading screen. Epic also put the button to preview an item in Fortnite adjacent to the purchase button, resulting in accidental purchases.
Furthermore, Fortnite allowed children to purchase the V-Bucks virtual currency without parental consent or card holder action until 2018, and it locked the accounts of users who disputed unauthorized charges through their credit card companies.
The FTC further determined that Epic ignored more than a million user complaints about wrongful charges and used internal testing to make the cancel and refund features more difficult to find.
The $245 million Epic pays to settle the dark pattern complaints will be used to refund customers. The FTC will handle the refunds and said it will set up the refund program on its own website.
Epic confirmed the settlement and said it would be "moving beyond long-standing industry practices."
"No developer creates a game with the intention of ending up here," the company said. "The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount. Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.
"Over the past few years, we’ve been making changes to ensure our ecosystem meets the expectations of our players and regulators, which we hope will be a helpful guide for others in our industry."
Developers interested in reading more about COPPA can refer to our primer on the law and the obligations it mandates for game makers.