Fortnite maker Epic Games must pay $520 million for spying on kids in FTC settlement

Fortnite was playing with consumer protection laws while your kids were playing it.

Epic Games, makers of the hugely popular Fortnite series, has documented the Federal Trade Commission’s (FTC) history of violations of children’s privacy and “dark patterns” that intentionally trick users into purchasing with manipulative designs. We have paid the largest two settlements.

The settlement, announced Monday, requires Epic to pay a total of $520 million for two consumer protection matters. He’s $275 million for invasion of privacy, and $245 million for making it easier for consumers to accidentally purchase goods, cancel or make it too difficult. We will refund those purchases. The money will be returned to the consumer. This is the largest payout in a gaming case and the largest executive order in FTC history. The $275 million fine is the highest ever for a violation of the Children’s Online Privacy Protection Act (COPPA) (his previous FTC record was $136 million). Google sued over YouTube videos made for kids).

“Protecting the public, especially children, from online privacy violations and dark patterns is a top priority for the Commission, and these enforcement actions are a testament to the FTC’s commitment to these efforts,” said FTC Chairman Lina Khan. It clearly shows companies that they are cracking down on illegal activities.” statement.

The recent FTC is best known for its aggressive stance on antitrust regulation under Chairman Khan, but it also enforces consumer protection laws. These settlements show that the company has not let its mandate expire and is not afraid to go after industry leaders.

The FTC had been investigating dark patterns even before Khan arrived, with then-Chairman Rebecca Kelly Slaughter hosting a dark patterns workshop in April 2021. Alvaro Bedoya was finally confirmed as his commissioner to the agency in May after months of delays. Before and after joining the FTC, he was a privacy advocate who was particularly vocal about children’s privacy.

COPPA requires companies to obtain parental consent before collecting data from children under the age of 13 online and to delete children’s data upon request. According to the FTC, Epic knew kids were playing Fortnite, but did nothing to obtain parental consent or properly honor data deletion requests.

Epic has also been accused of hurting, bullying, harassing, and threatening children by turning text and voice chat on by default in Fortnite. Epic finally added a way to turn off voice chat, but it made that button harder to find.

Senator Ed Markey (D-Massachusetts), one of the authors of COPPA, was pleased with the FTC’s action. Make a profit every day. The FTC revealed today that the threat of predatory behavior to young people extends far beyond social media. ”

Marquee called for the more than 20-year-old COPPA to be updated to reflect today’s Internet economy and target older children and children under the age of 13. COPPA is the only online consumer privacy law we have because Congress failed to pass it. anything else.

According to the FTC, the second settlement makes it difficult for Epic to deliberately trick most young users into making accidental or fraudulent purchases worth hundreds of millions of dollars and then cancel or refund those purchases. It concerns the operational tactics used to The buttons are unintentionally easy to tap, and the cancel and refund buttons are intentionally hard to find. Epic also did not obtain parental consent for minor users before allowing the purchase of Fortnite’s in-game currency, V-Bucks.

Finally, the FTC claims that when Epic disputes a charge, it permanently locks a customer’s account. Epic also threatened to permanently lock accounts if users disputed the charges again. This has had a chilling effect on the controversy, as users do not want to risk losing their entire accounts and the thousands of dollars and hours of time they have poured into them.

In both cases, the FTC claims Epic knew there was a problem because its own employees raised concerns. Epic mostly ignored it. In addition, he received over one million complaints from consumers regarding these fraudulent charges.

In a statement, Epic Games said the FTC’s complaint concerns past practices common in the gaming industry. Basically it’s just doing what everyone else was doing and not doing those things anymore.

“The old status quo of in-game commerce and privacy is changing, requiring many developers to rethink their practices,” the company said. “We want Epic to be at the forefront of consumer protection and to give players the best possible experience.”

A $275 million privacy penalty will be paid to the government. $245 million will be returned to consumers. If you think you are also included, this FTC link has more details on what to do next.

The $520 million they have to pay for infractions in Fortnite is a record amount, but Epic makes billions of dollars each year. Most of it comes from Fortnite.