Epic to pay $520 million for breaching US children’s protection act with Fortnite

Fortnite Chapter 4 Header Art

The US Federal Trade Commission has announced that Epic Games will pay a total of $520 million over allegations that they violated the Children’s Online Privacy Protection Act (COPPA) and maliciously duped millions of players into making unintentional purchases in the battle royale game Fortnite.

This is a two part settlement that Epic has agreed to in Federal courts, each of which is record-breaking, coming to more than half a billion dollars. Epic will pay a $275 million penalty for violating the COPPA rules, and will also have to refund customers $245 million for its use of ‘dark patterns and billing practices.’

Beyond that, the FTC will force Epic to adopt stronger default privacy settings in its game for children and teens – this will ensure that voice and text communications are off by default, requiring parental consent to enable – and make changes to the purchase system so that purchases are not using confusing, shifting layouts and button inputs to dupe people into accidental purchases.

This will be overseen by independent auditors, while the refund process will have to be offered to customers, which could take many months to process.

FTC Chair Lina M. Khan said, “As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children. 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.”

Update: Epic has also released a statement detailing changes they have made throughout Fortnite, both as part of this settlement and also historically.

“No developer creates a game with the intention of ending up here. 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.”

Addressing the various points made by the FTC, they detail the refund system implemented in May 2018, with tokens and the ability to undo purchases, as well as making the purchase process more drawn out to reduce accidental purchases.

On the topic of COPPA, Epic notes that Fortnite is rated for Teen players and up, and state that they direct the game at “an older teen and college-aged audience.” Despite this, they’ve fallen foul of the FTC and courts, and have taken action with the new consideration that they need to factor it in globally and for all players under 18. In particular, Cabined Accounts are designed for players under 13 to require parental consent, in addition to the new default chat and voice settings.

See more of Epic’s statement here.

While this is a landmark victory for the FTC and will push not just Epic but other game makers to take privacy seriously and not indulge in quite so grubby money-making tactics, whether that’s something intentional or through poorly considered design… it’s also just a slap on the wrist when it will have a minimal impact on Fortnite’s stream of income for the company. Epic had revenue of $5.7 billion in 2021, so this is cutting out around 10% of the company’s earnings from one year.

Source: FTC, Epic Games

Written by
I'm probably wearing toe shoes, and there's nothing you can do to stop me!

1 Comment

  1. The basic premise of all of those FTP games is unwaveringly the use of player manipulation to encourage them to continue regularly spending money on the game. It’s called Games as a Disservice.

Comments are now closed for this post.