In an announcement by the United States Federal Trade Commission earlier today, it was confirmed that an agreement was formed requiring Epic Games, creator of the battle-royale game Fortnite, to pay a total of over $520 million USD over “allegations the company violated the Children’s Online Privacy Protection Act (COPPA) and deployed design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases”.
This more than half-a-billion dollar action involves two separate settlements, described as follows:
As part of a proposed federal court order filed by the Department of Justice on behalf of the FTC, Epic will pay a $275 million monetary penalty for violating the COPPA Rule—the largest penalty ever obtained for violating an FTC rule. Additionally, in a first-of-its-kind provision, Epic will be required to adopt strong privacy default settings for children and teens, ensuring that voice and text communications are turned off by default. Under a separate proposed administrative order, Epic will pay $245 million to refund consumers for its dark patterns and billing practices, which is the FTC’s largest refund amount in a gaming case, and its largest administrative order in history.
This is an impressive sum for Epic Games to have to pay, although here’s hoping this serves as a case study to encourage companies to do the right thing in terms of privacy, especially the youngest and most vulnerable of gamers, and encourages additional safeguards to encourage developers to be transparent with users over in-app purchases.
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.
Lina M. Khan – FTC Chair
The Justice Department takes very seriously its mission to protect consumers’ data privacy rights. This proposed order sends a message to all online providers that collecting children’s personal information without parental consent will not be tolerated.”
Vanita Gupta – Associate Attorney General
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. Under the proposed orders announced today, the company will be required to change its default settings, return millions to consumers, and pay a record-breaking penalty for its privacy abuses.
Samuel Levine – Director of the FTC’s Bureau of Consumer Protection
Epic Games has since issued their own statement, which can be read in full HERE, including actions they are taking regarding both topics.
