Epic Games Fined More Than $500 Million Over Fortnite’s ‘Unfair’ Microtransaction Practices
Epic Games will have to pay $520 million over “design tricks…to dupe millions of players into making unintentional purchases” in Fortnite, the Federal Trade Commission [FTC] announced today.
The fine stems from what the FTC calls two separate “record-breaking” settlements. One is a $275 million fine for violating the Children’s Online Privacy Protection [COPPA] rule, which imposes limitations on websites and online services directed to children under 13-years-old. Epic will also have to pay $245 million in refunds to customers over its “dark patterns.”
According to the FTC, Fortnite uses “privacy-invasive default settings” and “deceptive interfaces” that “tricked” players.
“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,” said FTC chair Lina Khan.
These “dark patterns” include tricking players into making unintended in-game purchases through a “counterintuitive, inconsistent, and confusing button configuration,” including being charged while waking up from sleep mode. The FTC also says that account holders can be charged without authorization, and that children have racked up “hundreds of dollars” in charges before parents were aware of what was happening. On that front, the FTC says that Epic “ignored more than one million user complaints” over wrongful charges while “purposefully” obscuring cancel and refund features.
Fortnite’s voice chat settings are also in the crosshairs, Epic responds
In addition to microtransactions, Fortnite’s voice chat was in the FTC’s crosshairs. The FTC claims that Epic employees “urged” the company to change Fortnite’s default settings to require users to opt in for voice chat, but that the company “resisted” turning the feature off even as children were “harassed, including sexually, while playing the game.”
As a result, Fortnite will be required to disable voice and text communications for children and teens under 13-years-old, or for parents to provide consent through the privacy setting. Epic must also delete personal information gathered from Fortnite users in violation of the COPPA rule, and to establish a “comprehensive privacy program.”
Epic published a lengthy response of its own, saying in part, “No developer creates a game with the intention of ending up here. 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.”
Epic went on to address the allegations point by point, saying that “all game developers should rethink steps they’ve taken to simplify payment flows” and noting that it implemented a high privacy default setting in September. Epic also listed what it says is an updated chargeback policy, self-service refunds, instant cancellations of cosmetic purchases, and “no paid random item loot boxes since 2019 and no gambling ever.”
The fines are more evidence of the FTC’s growing attention toward the video game industry, which includes suing to block Microsoft’s attempted acquisition of Activision Blizzard. Meanwhile, Epic has been locked in various lawsuits with Apple and Google over issues like Apple’s 30 percent take from both apps and in-app purchases.
Fortnite recently kicked off Chapter 4, which is described as a “new beginning” thanks to a major graphical overhaul and other updates.
This story has been updated with Epic’s response to the FTC settlements.
Kat Bailey is a Senior News Editor at IGN as well as co-host of Nintendo Voice Chat. Have a tip? Send her a DM at @the_katbot.
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