Epic Games — the company behind Fortnite — has reached a half-billion dollar settlement with the Federal Trade Commission (FTC) over kid’s privacy concerns and unwanted purchases.
“Epic put children and teens at risk through its lax privacy practices, and cost consumers millions in illegal charges through its use of dark patterns,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection in a statement. “Under the proposed orders … the company will be required to change its default settings, return millions to consumers, and pay a record-breaking penalty for its privacy abuses.”
The game developer will pay $245 million to the FTC for unwanted purchases that happened due to Fortnite’s saved payment information. The practice led to kids racking up hundreds or thousands of dollars in credit card bills and often led to accidental purchases from adults as well. While one-click purchases are not illegal, Epic’s use of them is described by the FTC as “dark patterns” that purposely caused the unwanted charges.
“No developer creates a game with the intention of ending up here,” Epic Games says in a statement. “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.”
Epic said that while Fortnite implemented a refund and undo-purchase system in 2018, the company has also added a payment confirmation page to make sure players intended to spend real money and other safeguards.
Epic will also pay $275 million for violating the Children’s Online Privacy Protection Act (COPPA) by using default settings that subjected kids to online harassment from adults and collecting their personal information.
“As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,” says FTC Chair Lina M. Khan. “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.”
While Fortnite is geared towards older teenagers and adults, Epic introduced “cabined accounts” that have high privacy default settings for players under 13 in September. The default settings on cabined accounts block chat, turn off personalization settings, and set parties to “invite only.” Accounts for players under 16 also have a default mature language filter applied to them.
Users that are eligible for a refund include parents whose kids made unauthorized purchases in the Epic Games Store between January 2017 and November 2018, Fortnite players who were charged V-bucks for unwanted in-game items from January 2017 to September 2022, and Fortnite players whose accounts were locked for disputing unauthorized charges between January 2017 and September 2022. To get more information on the refund, check ftc.gov/fortnite.
