The Federal Trade Commission on Monday announced a $520 million settlement with Epic Games, the developer of popular video games like Fortnite and Fall Guys, over charges that the company illegally collected information from children and, separately, tricked millions of players into making unintentional purchases.
The deal involves record penalty amounts in two separate cases.
Epic agreed to pay $275 million to settle regulators’ accusations that it violated a federal law, the Children’s Online Privacy Protection Act, by collecting personal information from children under 13 who played Fortnite without obtaining verifiable consent from a parent. The company also made parents “jump through hoops” to have their children’s data deleted and sometimes failed to honor parents’ deletion requests, the agency said in a legal complaint filed on Monday.
The amount dwarfs the $5.7 million penalty — the previous record for child privacy violations — that Musically, a video-sharing site now known as TikTok, agreed to pay in an F.T.C. settlement in 2019.
As part of the proposed settlement, the agency will require Epic to adopt high-privacy default settings for children and teens. That means the company must turn off settings that had enabled live text and voice chats for younger users.
Epic also agreed to pay $245 million to refund consumers over accusations that it used manipulative online practices, known as “dark patterns,” to trick users of all ages into making unintended purchases. Among other things, Fortnite’s user interface had a “counterintuitive, inconsistent and confusing” layout that led users to incur charges with the press of a single button, regulators said in a separate complaint.
Players could be charged while trying to activate the game from sleep mode or while the game was loading a screen, the complaint said. Children ended up racking up unauthorized charges without their parents’ knowledge. These dark pattern techniques led to hundreds of millions in unwanted charges for users.
This is a developing story. Check back for updates.
