The creator of the popular video game “Fortnite,” Epic Games, has agreed to pay the US government a total of $520 million to resolve claims that it deceived millions of players, including kids and teenagers, into making unintended purchases and that it broke a key federal law protecting the privacy of children.
In order to settle allegations that it violated the Children’s Online Privacy Protection Act (COPPA) by collecting the personal information of children under the age of 13 without first obtaining their parents’ verifiable consent, Epic has agreed to pay the US government $275 million. According to the FTC, it is the biggest fine it has ever assessed for breaking a rule it has enforced.
In a second, separate settlement, Epic will fork out $245 million in payments to customers who the FTC claims were injured by user-interface design decisions that were misleading. According to the FTC, this accord represents the largest administrative order in agency history.
Epic said that the arrangement indicates a change in how US laws are applied to the video game industry in a blog post on the twin settlements.
In the blog post, Epic stated that “no developer designs a game with the purpose of ending up here. We agreed to this agreement because we want Epic to lead the way in consumer protection and give our gamers the finest possible experience.
The settlement, according to FTC Chair Lina Khan, demonstrates the agency’s increased attention on privacy and so-called “dark patterns,” which are design cues meant to steer users in the direction of a company’s favored outcome.
Khan said in a statement that the FTC’s enforcement actions show businesses that the agency is taking tough action against these illegal practices. “Protecting the public, and especially minors, from online privacy violations and dark patterns is a primary concern for the Commission,” Khan said.
Concerning children’s privacy, the FTC filed a complaint and proposed settlement with the US District Court for the Eastern District of North Carolina. The FTC also asserted that Epic’s default settings for matching and in-game communications exposed kids to bullying and harassment in addition to the alleged illegal gathering of children’s data.
The claims about Epic’s allegedly deceptive design decisions were made in an administrative complaint to the FTC. According to the complaint, more than a million parents have complained to Epic about unauthorized payments as a result of how simple it was for kids to buy in-game things with only a click or button press and without getting permission from their parents.
The FTC also claimed that Epic made it more challenging for customers to return in-game products by tucking the choice away at the bottom of the screen and required them to press and hold a button on their controllers. Accidental charges were supposedly the “number one’reason'” customers clicked on the cancel button when it was more prominently displayed, according to surveys, which led to the implementation of such design decisions, the FTC said.
The FTC and Epic have reached a tentative deal that restricts Epic from charging customers without their permission or utilizing dark patterns. It also forbids Epic from locking players out of their accounts in response to users’ refund requests with credit card providers contesting erroneous payments.The agreement will be in effect for 20 years after it is enacted.
The FTC and Epic have agreed to introduce a feature that expressly asks Fortnite players if they want to keep their payment information for use in the future, according to a blog post by Epic. The function is active right now, it was added. Additionally, the business just released a more constrained version of “Fortnite” for younger users, which limits communication and transactions but still lets kids access some features while waiting for parental approval.
According to the FTC, Epic may no longer by default enable text and voice chat for adolescent Fortnite users or those under the age of 13 as part of its children’s privacy settlement. The business must also create a thorough privacy procedure and remove the information it allegedly collected in breach of COPPA.
The tactics mentioned in the FTC’s complaints are not how Fortnite operates, according to Epic. “We share the core principles of fairness, openness, and privacy that the FTC enforces,” the company noted. “We will continue to be clear about what players may anticipate when making purchases, make sure that requests for cancellations and refunds are straightforward, and implement protections that help keep our ecosystem secure and enjoyable for users of all ages,” the company stated.