Epic Games agrees to pay $520 million in FTC settlement

FTC complaint involved child privacy and unintended purchases

Fortnite developer Epic Games has announced today that it will pay a total of $520 million in a settlement with the Federal Trade Commission. The total amount is accrued between two complaints, over privacy violations and tricking players into unintended purchases.

The FTC originally claimed that Epic violated the Children’s Online Privacy Protection Act, or COPPA, by collecting personal data from children without obtaining parental consent. Having voice and text chat on by default in the settings while matching these players with strangers also harmed children and teens, the FTC alleges.

The Commission also claims Epic deployed trickery to “dupe” players, causing them to make unintended purchases and blocking access to purchased content as an obstacle for disputing charges.

As part of a proposed federal court order, Epic will pay two penalties in the proposed settlement: $275 million for the privacy accusations, and $245 million to refund customers over the billing practices. Additionally, the FTC also calls for Epic to adopt strong default privacy settings for children and teens playing Fortnite. This includes an option for text and voice communication to be turned off by default, something Epic has already implemented for under-18 players, alongside setting party invite defaults to “invite only” and personalized recommendations to off. The text chat’s mature language filter also defaults to “on” for players below the age of 16.

Settling down

Epic has also already rolled out an option called Cabined Accounts. This is a setting specifically for Epic Games accounts that will require parental consent for certain options, like making in-game purchases or using voice chat. Users can still play games like Fortnite, Fall Guys, or Rocket League while cabined, but in “tailored” environment for younger users.

As for the shop, the FTC’s allegations claim that Epic used “dark patterns” to trick players into making unwanted purchases. Confusing button configurations, charging account holders without authorization, and blocking access to purchased content are among the accusations. The $240 million portion of the Epic settlement will go towards player refunds over these issues. The order also bars Epic from blocking consumers from accessing their purchased content for disputing unauthorized charges.

“No developer creates a game with the intention of ending up here,” said Epic 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. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”

The FTC also recently filed to block Microsoft’s acquisition of Activision Blizzard.

This article has been updated to clarify Epic’s privacy setting options within Fortnite.