Dec 19, 2022 - Technology

Epic Games fined $520 million in FTC's Fortnite privacy case

Screenshot of Fortnite game with players on motorbikes

Fortnite. Screenshot: Epic Games

The Federal Trade Commission has fined Epic Games, maker of the popular Fortnite video game, more than half a billion dollars to settle allegations of privacy violations and unwanted charges.

Driving the news: The fines, first reported by the Wall Street Journal, amount to "the largest penalty ever obtained for violating an FTC rule," per the commission.

  • The FTC also alleged Epic Games used "dark patterns," or design tricks, to "dupe millions of players into making unintentional purchases," per a release from the agency.

Details: Epic will pay $275 million for violating the COPPA rule, and in a provision the FTC says is the first of its kind, Epic will be required to required to "adopt strong privacy default settings for children and teens, ensuring that voice and text communications are turned off by default."

  • The FTC alleged that Epic knew children were playing Fortnite and collected data from them without parental consent and that its default settings were harming young users.
  • Epic will also pay $245 million to refund customers for its "dark patterns and billing practices," which the agency says is its largest refund for a gaming case and biggest administrative order in history.
  • The FTC says Epic "ignored more than one million user complaints and repeated employee concerns that 'huge' numbers of users were being wrongfully charged."

Thought bubble, from Axios gaming reporter Stephen Totilo: Free-to-play games like Fortnite woo players with free basics and then tempt them to pay to have a better time. The FTC settlement might make some game makers think twice about abusing that financial model.

  • But for Epic, which makes billions, this was an expensive embarrassment that the company could afford.
  • Epic is also facing a class action lawsuit in Canada over whether Fortnite was designed to be addictive to kids. The company has told Axios it finds the suit "meritless."

What they're saying: "No developer creates a game with the intention of ending up here," a rep for Epic Games said in a lengthy statement that outlined privacy measures the company has taken in recent years.

  • "We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players."
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