Epic Games is hit with a $520 million fine by the FTC as a result of Fortnite complaints.

By Justin Jones On Dec 19, 2022

Epic Games is hit with a $520 million fine by the FTC as a result of Fortnite complaints. To resolve two FTC complaints about the company’s use of children’s personal information and its use of “dark patterns” to promote unintentional in-game purchases, Epic Games will pay over $500 million. The FTC also ordered changes to how Epic manages player interactions and in-game purchases in its online games, along with the penalties, which it claims are some of the biggest ever levied against the company.

Adhering to COPPA and exposing “dark patterns.”

In its initial complaint, the FTC claimed Fortnite “failed to comply with the parental notice, consent, review, and deletion requirements of the COPPA (Children’s Online Privacy Protection Act) Rule.” The alleged violations included publicly broadcasting young players’ account names and turning on voice and text chat features by default.

Epic has recently altered these rules, implementing default settings for players under 18 that restrict chat, conceal usernames, and permit party joining by “invite only.” The launch of “cabined accounts” earlier this month, which restricts young children’s accounts from accessing all online features until an adult verifies them, was also mentioned by Epic.

The FTC claimed in a different complaint that Epic frequently charged Fortnite players for in-game goods without receiving their “express informed consent.” According to the FTC, “millions of complaints” to Epic and disputes over unauthorized charges with credit card companies resulted from the use of “design tricks known as “dark patterns.”

For instance, until the end of 2018, Epic didn’t require the CVV security information for subsequent purchases and instead automatically stored the credit card information for anyone who made a purchase in Fortnite. According to the FTC, this made it simple for many kids to make additional purchases without their parent’s permission.

The FTC also criticized Epic for placing the “Purchase” button for in-game items right next to the “preview styles” button and not providing a confirmation prompt for subsequent purchases in the event of accidental clicks. And even though Epic added an “Undo Purchase” button in July 2019, it was ultimately made much less obvious and more challenging to locate.

In response to the FTC’s complaint, Epic will now use a “hold-to-purchase” button on its store pages to “re-confirm a player’s intent to buy.” Additionally, the business offers self-service refunds and instant purchase cancellations, hopefully eliminating the need to deal with some complaints through a credit card company. Further, Epic will no longer instantly assume that a credit card chargeback results from fraud and ban the account in question.

A new world of enforcement

The FTC investigation found that Epic was fully aware of its actions in both situations. According to an Epic product manager cited in the FTC complaint, Epic decreased the “net undo rate” by 35% by lessening the prominence of the “Undo Purchase” button, for example.

Epic will pay $275 million to the US Treasury for COPPA compliance. The affected customers will be refunded with the help of an additional $245 million paid for the “dark patterns” complaint. Both penalties were imposed by a unanimous vote of the four FTC commissioners.

Other online game developers should be cautioned to take these protections more seriously by the hefty fines, which should go beyond Epic. While Fortnite has an ESRB rating of T for Teen, Epic warns in a blog post about the settlements that developers “can no longer assume [such a rating] won’t be deemed to be directed to children” under COPPA.