The maker of the popular video game Fortnite, Epic Games, agreed to pay a US$520 million ($709,072,000) settlement regarding claims the developer violated child privacy laws and duped players into making accidental in-game purchases.
The Federal Trade Commission (FTC) released a statement Monday explaining the record-breaking settlement will be paid in two parts. Epic agreed to pay $275 million for collecting the personal information of children under 13 without a parent’s consent, and another $245 million over unwanted consumer charges.
According to the FTC, Fortnite, which is a highly popular interactive battle royale game, invaded the online privacy of children and teenagers — who make up a large portion of the game’s player base. The government watchdog claimed minors were exposed to bullying, harassment and traumatizing issues such as suicide through the game’s automatic text and voice chat features.
The real-time chat feature was automatically enabled in the game’s settings. As a result of the FTC settlement, Epic has agreed to change privacy settings for minors, including keeping the chat disabled by default.
The FTC statement also claimed Fortnite players — of which there are 400 million globally — were faced with “counterintuitive, inconsistent, and confusing” controls that caused millions of players to make unintentional purchases. This deceptive practice is known as “dark patterns” and reportedly earned Fortnite hundreds of millions of dollars in unauthorized charges.
Though Fortnite is free to download, developers make money from in-game purchases for add-ons like character skins and dance moves.
Epic neither confirmed nor denied the FTC’s allegations but published a statement on its website.
“No developer creates a game with the intention of ending up here,” the company wrote. “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 video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount,” the statement continued. “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.”
The FTC’s statement was much less sympathetic.
“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,” the director of the FTC’s Bureau of Consumer Protection, Samuel Levine, said.
Levine added that because of the FTC’s proposed orders, Epic will “be required to change its default settings, return millions to consumers, and pay a record-breaking penalty for its privacy abuses.”
The FTC will refund Fortnite players, or parents of Fortnite players, who made an authorized credit card purchase in the game between January 2017 and November 2018.
It is currently unclear how the refund process will work, though Fortnite players who made a purchase during that time frame will receive an email about the settlement.
This year, the Wall Street Journal claimed Epic was worth $32 billion. Fortnite, which was released in 2017, reportedly made more than $9 billion in revenue during its first two years alone.
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