Epic Games, creator of the hit video game “Fortnite,” has decided to pay a total of $520 million to settle US government allegations that it deceived millions of players, including children and teenagers, into making unintentional buys and that it infringed a landmark federal children’s privacy law.
As part of the contract, Epic will pay $275 million to the US government to settle claims it infringed the Children’s Online Privacy Protection Act (COPPA) by collecting the personal information of kids under the age of 13 without first obtaining their parent’s verifiable permission. It is the most extensive fine the FTC has ever imposed for a rule that it executes, the agency stated Monday.
In a second and different settlement, Epic will pay $245 million as refunds to customers who were allegedly harmed by user-interface design options the FTC claimed were misleading. That agreement is the biggest administrative order in FTC history, the FTC added. In a blog post addressing the twin settlements, Epic told the agreement mirrors an evolution in how US laws are applied to the video gaming enterprise.
No designer makes a game with the purpose of ending up here, Epic told in the blog post. We accepted this agreement because we want Epic to be at the forefront of customer safety and deliver the best experience for our performers.
FTC Chair Lina Khan told the settlement mirrors the agency’s increased focus on privacy and so-called “dark patterns,” a word used to describe the structure or design elements intended to attract users toward a company’s preferred result.
Protecting the people, and especially children, from online privacy attacks and dark patterns is the highest preference for the Commission, and these enforcement actions make apparent to businesses that the FTC is breaking down on these unlawful practices, Khan stated in a statement.
The FTC’s complaint and proposed compromise or negotiating with children’s privacy were filed in the US District Court for the Eastern District of North Carolina. In addition to the alleged unlawful collection of children’s data, the FTC also claimed that Epic’s default settings for matchmaking and in-game communications revealed children to bullying and harassment.
The allegations of Epic’s tricky design options were filed as an FTC organizational complaint. The complaint claims Epic made it too easy for children to buy in-game items with one tap or button press without parental approval, resulting in more than one million parental complaints to Epic about undesirable charges.
The FTC also alleged that Epic made it more complicated to cancel buys of in-game items by concealing the option at the bottom of the screen and by needing consumers to push and keep a button on their controllers to finish the cancellation. Those design options were allegedly executed after surveys revealed that, when the cancel button was more prominently displayed, unanticipated charges were the “number one ‘reason’” users tap on the button, the FTC stated.
Epic’s deal with the FTC, which is not yet final, forbids the company from using dark patterns or charging customers without their consent and also forbids Epic from sealing players out of their accounts in response to users’ chargeback requests with credit card companies disputing undesirable charges. The contract will last for 20 years from the moment it is assumed.
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