‘Fortnite’ Maker Epic Games to Pay $520 Million in Record-Breaking FTC Settlement

Epic Games, maker of the hit video game “Fortnite,” has agreed to pay a total of $520 million to settle US government allegations that it misled millions of players, including children and teens, into making unintended purchases and that it violated a landmark federal children’s privacy law.

As part of the agreement, Epic will pay $275 million to the US government to resolve claims it violated the Children’s Online Privacy Protection Act (COPPA) by gathering the personal information of kids under the age of 13 without first receiving their parents’ verifiable consent. It is the largest fine the FTC has ever imposed for a rule that it enforces, the agency said Monday.

In a second and separate settlement, Epic will pay $245 million as refunds to consumers who were allegedly harmed by user-interface design choices the FTC claimed were deceptive. That agreement is the largest administrative order in FTC history, the FTC added.

In a blog post addressing the twin settlements, Epic said the agreement reflects an evolution in how US laws are applied to the video gaming industry.

“No developer creates a game with the intention of ending up here,” Epic said in the blog post. “We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”

FTC Chair Lina Khan said the settlement reflects the agency’s heightened focus on privacy and so-called “dark patterns,” a term used to describe design elements intended to nudge users toward a company’s preferred result.

“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,” Khan said in a statement.

The FTC’s complaint and proposed settlement dealing with children’s privacy was filed in the US District Court for the Eastern District of North Carolina. In addition to the alleged illegal collection of children’s data, the FTC also claimed that Epic’s default settings for matchmaking and in-game communications exposed children to bullying and harassment.

The allegations of Epic’s deceptive design choices were filed as an FTC administrative complaint. The complaint claims Epic made it extremely easy for children to purchase in-game items with a single click or button press without parental approval, resulting in more than one million parental complaints to Epic about unwanted charges.

The FTC further alleged that Epic made it more difficult to cancel purchases of in-game items by burying the option at the bottom of the screen and by requiring consumers to push and hold a button on their controllers to complete the cancellation. Those design choices were allegedly implemented after surveys showed that, when the cancel button was more prominently displayed, accidental charges were the “number one ‘reason’” users clicked on the button, the FTC said.

The post ‘Fortnite’ Maker Epic Games to Pay $520 Million in Record-Breaking FTC Settlement was originally published on CNN.