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As part of a $520 million settlement, the Federal Trade Commission (FTC) charged Epic Games on Monday morning for allegations involving children’s privacy. According to a press release from the FTC, Epic Games, the developer of well-known all-ages video games like “Fortnite” and “Fall Guys,” allegedly violated the Children’s Online Privacy Protection Act (COPPA) by using “design tricks, known as dark patterns, to trick millions of players into making unintentional purchases.”
Two settlements totaling $520 million are covered by this payment: The $275 million COPPA fine is the highest fine ever imposed by the FTC for breaking a rule. The FTC also fined Epic $245 million for “dark patterns and billing practices,” which it singles out in its complaint. The second fine, which will be the FTC’s largest-ever refund sum in a gaming case, is one that Epic claims it will pay.
“Decades-old laws don’t outline how gaming ecosystems should function. Long-standing industry practices are no longer sufficient, although the laws haven’t changed; rather, their implementation has altered. We agreed to this agreement because we want Epic to lead the way in consumer protection and give our gamers the finest possible experience.
According to Epic, it has modified its payment flows to include immediate purchase cancellations, self-service refunds, and a yes or no choice to save payment information.
The FTC objected to Epic’s default settings for its live text and voice chat services, saying that they made it too simple for kids to make online purchases. Since Epic had no way of ensuring that children and adults would not be matched up in online play, the FTC alleges that these features exposed children to harassment and abuse. Children have been exposed to bullying, threats, harassment, and “psychologically distressing concerns such as suicide” while playing the game, the FTC claims in a news statement.
In its response to the FTC penalty, Epic cited a brand-new function called Cabined Accounts that it had only launched earlier this month. Features like chat and purchase are restricted if a player registers with a birth date that puts them under their country’s legal minimum age for digital consent (13 in the U.S.). When a child registers, their parent will be notified through email and may then, if they so desire, modify their child’s settings. For now, “Fortnite,” “Fall Guys,” and “Rocket League” all have access to this feature.
Epic has raised more than $3 billion in venture capital during the past two years, most recently at a $31.5 billion value. Lego’s parent firm invested $1 billion in Epic, and both companies are striving to create a kid-friendly metaverse.
Additionally, Epic and Apple are involved in a legal dispute over alleged anti-competitive actions on Apple’s part. The video game developer contested Apple’s right to ban products from the iOS App Store if they divert users away from purchasing in-app, where Apple receives a 30% cut.
