Epic payment: Fortnite maker pays record $520m to settle FTC case

Someone thought of the children, and the dark patterns

Updated The owner of Fortnite is paying the FTC an Epic amount of cash after a pair of unanimous 4-0 decisions found it guilty of violating children's privacy and tricking customers into making unwanted purchases.

Under the settlements, Epic Games will pay $275 million to the FTC for violating the Children's Online Privacy Protection Act, or COPPA, and $245 million that will go toward refunding customers fooled by "dark patterns" in the Fortnite app. 

According to the FTC, both settlements are record breakers: The COPPA penalty is "the largest penalty ever obtained for violating an FTC rule," while the dark pattern payout "is the FTC's largest refund amount in a gaming case, and its largest administrative order in history."

"As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children … these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices," said FTC Chair Lina Khan.

Fortnite harms kids, says FTC

The FTC alleged that Epic Games violated COPPA by collecting the personal information of gamers under the age of 13 without obtaining their parents' consent. In addition, the FTC said that those who requested the deletion of their children's personal information had to "jump through unreasonable hoops," and that Epic Games often failed to honor requests regardless.

In addition, the FTC claimed Epic's default enabling of live text and voice chat in Fortnite led to children and teenagers being "bullied, threatened, harassed, and exposed to dangerous and psychologically traumatizing issues such as suicide while on Fortnite." 

Epic has changed its default settings to disable voice and text chat for users under the age of 13, without adult consent. Epic must also delete all previously gathered data for users under the age of 13 and establish an FTC compliance program that regularly reports independent audits to the Commission.

FTC: Fortnite's bad UI tricked users into buying stuff they didn't want

The second settlement involves the use of dark patterns that confuse users and trick them into making unwanted purchases, and said that underage users often ended up making multiple charges to their parent's accounts without parental consent. 

The FTC alleged that Fornite's UI had a "counterintuitive, inconsistent, and confusing button configuration [that] led players to incur unwanted charges based on the press of a single button," citing examples involving players making an accidental purchase doing something as simple as waking the game from sleep mode. 

The FTC also alleged account holders were charged without expressed consent, and that the company blocked access to accounts of users who disputed charges. 

"Epic ignored more than one million user complaints and repeated employee concerns that 'huge' numbers of users were being wrongfully charged," the FTC said, adding that "Using internal testing, Epic purposefully obscured cancel and refund features to make them more difficult to find."

As part of the second settlement, Epic Games will also be prohibited from using dark patterns in the future, and will be required to obtain affirmative consent for all purchases. The order also prohibits Epic from banning users who dispute charges. Epic admits no guilt as part of the settlement.

Epic is still suing Apple and Google to loosen the Android and iPhone maker's stranglehold on in-app purchases and accompanying fees they skim off developer profits. The Fortnite maker has been in protracted battles with both companies over their 30 percent commissions, which it's likely going to want even more now that the FTC has raided its base. ®

Updated to add

Epic has released the following canned statement:

"The old status quo for in-game commerce and privacy has changed, and many developer practices should be reconsidered," it said.

"We share the underlying principles of fairness, transparency and privacy that the FTC enforces, and the practices referenced in the FTC's complaints are not how Fortnite operates. We will continue to be upfront about what players can expect when making purchases, ensure cancellations and refunds are simple, and build safeguards that help keep our ecosystem safe and fun for audiences of all ages."