Epic Games will pay $520 million to the FTC over allegations the company violated children's privacy and tricked players into unintended purchases.
The creators of Fortnite will pay record-breaking penalties to the Federal Trade Commission, who confirmed the total fine amounts via a statement on its website. The federal agency announced that Epic will pay a $275 million monetary penalty for violating the Children’s Online Privacy Protection Act (COPPA), in addition to a separate $245 million penalty, which will be used to refund players who made unwanted or unauthorised purchases, including purchases by children without any parental involvement.
Epic will also be required to adopt strong default privacy settings for children and teens in Fortnite, with voice and text communications to be turned off by default. If you're looking for some additional context for how these fines came about, we've summarised both complaints below.
Fortnite privacy violations – $275 million fine
The FTC filed a complaint in federal court alleging that Epic violated COPPA by collecting personal information from children whilst playing Fortnite, without their parent's consent.
The complaint states that Epic matched children and teenagers with strangers to play Fortnite, exposing them to being bullied, threatened and harassed while playing the game. The FTC also alleged that Epic employees expressed concern about the default communication settings that led to the above issues, and whilst a button was eventually added for users to disable voice chat, Epic made it difficult to find.
Following this complaint, the Commission voted to refer the civil penalty complaint to the Department of Justice, which led to a stipulated order in the U.S. District Court.
"As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children," said FTC Chair Lina M. Khan.
"Protecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the Commission, and these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices.”
On the fine related to privacy concerns, a statement from Epic said: "Fortnite is rated Teen and is directed at an older teen and college-aged audience. We recently rolled out Cabined Accounts, a new type of Epic account that provides a tailored experience that is safe and inclusive for younger players.
"Players under 13, or their country’s age of digital consent, whichever is higher, will be able to play Fortnite while they wait for parental consent, but in a tailored environment where certain features, such as chat and purchasing, are disabled."
Fortnite tricking players – $245 million fine
In a separate complaint, the FTC alleged that Epic tricked players into making unwanted purchases, also letting children rack up unauthorised charges without their parent's consent, by using "dark patterns".
The complaint states that Epic used a "variety of dark patterns aimed at getting consumers of all ages to make unintended in-game purchases", with the FTC describing Fortnite's button configuration as "counterintuitive, inconsistent, and confusing", which led players to make unwanted purchases with the press of one button.
It was also alleged that Epic allowed children to purchase V-Bucks – Fortnite's in-game currency – without any parental consent up until 2018. In addition, the complaint said that Epic locked customer accounts that disputed unwanted or unauthorised charges, and therefore lost access to all of the content they purchased.
"Epic ignored more than one million user complaints and repeated employee concerns that “huge” numbers of users were being wrongfully charged, reads the FTC statement.
"In fact, Epic’s changes only made the problem worse, the FTC alleged. Using internal testing, Epic purposefully obscured cancel and refund features to make them more difficult to find."
Following this complaint Epic must pay $245 million, which will be used to provide refunds to consumers. The game developer is also prohibited from charging customers without obtaining consent and blocking the accounts of customers who dispute charges.
On the fine related to dark patterns, Epic said: "Games should go above and beyond to make sure players even more clearly understand when they are making a purchase with real money or with virtual currencies to prevent accidental purchases. We don’t want players to pay for something that they did not intend to.
"We’ve updated our payment flows with a hold-to-purchase mechanic that re-confirms a player’s intent to buy, as an additional safeguard to prevent unintended purchases alongside instant purchase cancellations and self-service refunds.
"We’ve updated our chargeback policy to account for non-fraud related scenarios and will only disable accounts when fraud indicators are present. We have restored thousands of accounts that were banned due to reported chargebacks under our previous policy."
A number of Fortnite players may be eligible for refunds, as well as regaining access to their accounts, so be sure to log on and check yours if you think you might be affected.
