Fortnite developer ’Epic Games’ has agreed to pay $520 million as fine, to settle US government allegations that it misled millions of players, including children and teens, into making unintended purchases inside its Battle Royale game. Moreover, it violated a landmark federal children’s privacy law for which it is paying $275 million USD.
Epic will be paying $245 million USD to the Federal Trade Commission (FTC) to resolve concerns related to past designs of the Fortnite item shop and refund systems in Fortnite, which the FTC will use to distribute to Epic customers at their discretion. Epic Games will also pay the FTC a $275 million USD fine to resolve concerns related to children’s privacy in Fortnite, said the developer in a blog post.
Why the $275 million fine on Epic Games?
For the second violation discussed above, Epic 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.
“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”, said Epic.
“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,” FTC chair Lina Khan said in a statement.
To solve this, Epic says it implemented high privacy default settings for players under the age of 18 back in September. Chat defaults to “Nobody,” profile details default to hidden, parties default to “Invite Only,” and personalized recommendations are defaulted Off. Players under 16 also have the mature language filter defaulted On for text chat.
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Why the $245 million fine on Epic Games?
The complaint regarding Epic’s deceptive design choices claims that the developer 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.
Furthermore, the FTC alleged that Epic made it difficult to cancel the purchases of those in-game items by keeping the button 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.
“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”, clarified Epic.