The video game company Epic Games, which makes the popular online game Fortnite, will pay a total of $520m in penalties and refunds, according to US federal regulators the Federal Trade Commission (FTC). The penalties are linked to two complaints – one involving children’s privacy, and the other concerning methods that tricked players into making purchases.
Epic Games agreed to pay a $275m fine for collecting personal data on Fortnite players under the age of 13, without informing their parents or obtaining their consent for the access. It is alleged by the FTC that the company also exposed children and teens to bullying and harassment by turning on voice and text communications as a default – in response to the fine, Epic Games have agreed to change the game’s privacy settings for teenagers and children, and to have chat communications turned off by default. This is the biggest penalty ever issued for breaking an FTC rule.
The company is also refunding $245m to customers who fell victim to “dark patterns” and billing practices – that is, deceptive online techniques which are used to push users into doing things they did not intend to do. According to the FTC: “Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button.” Charges could be incurred for waking the game from sleep mode or button presses while in loading screens, for example. The FTC said that Epic Games had resisted changed its design, and that it locked the accounts of customers who disputed charges and “purposefully obscured cancel and refund features to make them more difficult to find”.
Epic Games said the practices detailed in the FTC’s complaints were “not how Fortnite operates”
FTC chair Lina Khan said: “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.”
Epic Games said that it had been making changes, and that the practices detailed in the FTC’s complaints were “not how Fortnite operates”. The company said: “No developer creates a game with the intention of ending up here. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.” It also said that it hoped to offer a model for the rest of the industry: “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 company suggested that this ruling could lead to radical shifts in the use of in-game commerce and privacy rules, and that many developer practices could be reconsidered as a result. It’s also a sign that the FTC is unafraid to exercise its power if it seems that these online spaces are facilitating unfair or illegal activities. It remains to be seen, however, whether this ruling will lead to a major change, or whether the FTC will continue to crack down on major publishers.