Epic Games, the developer behind the popular video game Fortnite, has agreed to pay a hefty $520 million to settle allegations made by the Federal Trade Commission (FTC) that the company violated children’s privacy laws and engaged in deceptive practices that led to millions of players making unintentional purchases.
The settlement, which was approved by a 4-0 vote by the Commission, includes a $275 million penalty for violating the Children’s Online Privacy Protection Act (COPPA) Rule, the largest penalty ever obtained for violating an FTC rule. The remaining $245 million will be used to refund consumers for Epic’s billing practices, which the FTC says used illegal “dark patterns” to trick players into making unwanted purchases and allowed children to rack up unauthorized charges without any parental involvement.
In addition to the monetary penalties, the settlement requires Epic to adopt stronger privacy default settings for children and teenagers, ensuring that voice and text communications are turned off by default. The FTC’s action serves as a warning to other online providers that collecting children’s personal information without parental consent will not be tolerated.
The settlement with Epic Games marks two separate record-breaking settlements for the FTC. The $275 million penalty for violating the COPPA Rule is the largest ever obtained for violating an FTC rule, while the $245 million refund for consumers is the largest ever obtained for a children’s privacy case.
The FTC’s action against Epic Games is a reminder that companies must take steps to protect the privacy of children and teens online. By agreeing to pay the record-breaking settlement and adopting stronger privacy measures, Epic Games is taking responsibility for its actions and working to ensure that similar issues do not arise in the future.
