Epic Games to Pay $520 Million in Fine for Fortnite Privacy Violations Lawsuit and Dark Patterns

Epic Games, the developer of Fortnite, will have to pay a hefty fine of $520 million for violating the privacy of its customers and dark patterns.

Fortnite is a battle royale game developed and published by Epic Games back in 2017. Since its release, its popularity skyrocketed, and it became one of the modern-day cultural phenomena. Today, millions of players around the world play Fortnite on a daily basis.

And among them, most are teens and children. Children and teens are attracted to Fortnite mostly because of its social draw. They can play with friends in squads and discuss Fortnite when they go to school or other social gatherings.

Because there are so many teens and children playing Fortnite, the previous dark patterns and privacy aspects of Fortnite apparently made a lot of these young players make accidental purchases. So, The Federal Trade Commission required Epic Games to pay a total fine of about $520 million because of Children’s Online Privacy Protection Act violation and dark patterns.

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Fortnite Privacy Violations and Unwanted Charges:

According to a blog post by the United States Federal Trade Commission, Epic Games is required to pay $520 million in relief over allegations of violating the COPPA and deploying design tricks that duped millions of players into making accidental purchases.

As part of this, Epic Games will pay a $275 million monetary penalty for violating the COPPA Rule and a separate $245 million to refund customers for its dark patterns and billing practices. This amount paid by Epic is the largest penalty for violating an FTC rule. Epic will also be required to ensure a strong privacy protection policy to protect the privacy of children and teens by making voice and text chat be turned off by default.

FTC Chair Lina M. 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.”

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection said the following,

“Epic put children and teens at risk through its lax privacy practices, and cost consumers millions in illegal charges through its use of dark patterns, Under the proposed orders announced today, the company will be required to change its default settings, return millions to consumers, and pay a record-breaking penalty for its privacy abuses.”

As mentioned previously, in the allegations filed by FTC, Epic violated COPPA rules by collecting information from children under 13 without parental consent. Epic also violated FTC Act’s prohibition against unfair practices by enabling voice and video chat by default for children and teens.

Privacy Violations:

Violated COPPA by Failing to Notify Parents, Obtain Consent: 

The FTC alleged that Epic was aware that many children were playing Fortnite—as shown through surveys of Fortnite users, the licensing and marketing of Fortnite toys and merchandise, player support and other company communications—and collected personal data from children without first obtaining parents’ verifiable consent. The company also required parents who requested that their children’s personal information be deleted to jump through unreasonable hoops, and sometimes failed to honor such requests.

Default settings harm children and teens:

Epic’s settings enable live on-by-default text and voice communications for users. The FTC alleges that these default settings, along with Epic’s role in matching children and teens with strangers to play Fortnite together, harmed children and teens. Children and teens have been bullied, threatened, harassed, and exposed to dangerous and psychologically traumatizing issues such as suicide while on Fortnite.

According to the report, Epic Employees apparently showed concern about the default settings back in 2017, but Epic resisted turning off the default settings. Although it eventually added a button, it was difficult to find, according to complaints.

Illegal Dark Patterns

Used dark patterns to trick users into making purchases:

The company has deployed a variety of dark patterns aimed at getting consumers of all ages to make unintended in-game purchases. Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button. For example, players could be charged while attempting to wake the game from sleep mode, while the game was in a loading screen, or by pressing an adjacent button while attempting simply to preview an item. These tactics led to hundreds of millions of dollars in unauthorized charges for consumers.

Charged account holders without authorization:

Children and other users who play Fortnite can purchase in-game content such as cosmetics and battle passes using Fortnite’s V-Bucks. Up until 2018, Epic allowed children to purchase V-Bucks by simply pressing buttons without requiring any parental or card holder action or consent. Some parents complained that their children had racked up hundreds of dollars in charges before they realized Epic had charged their credit card without their consent. The FTC has brought similar claims against companies such as AmazonApple, and Google for billing consumers millions of dollars for in-app purchases made by children while playing mobile app games without obtaining their parents’ consent.

Blocked access to purchased content:

The FTC alleged that Epic locked the accounts of customers who disputed unauthorized charges with their credit card companies. Consumers whose accounts have been locked lose access to all the content they have purchased, which can total thousands of dollars. Even when Epic agreed to unlock an account, consumers were warned that they could be banned for life if they disputed any future charges.

The report also suggests that Epic Games ignored more than 1 million customer user complaints and employee concerns. Epic Games is barred from blocking customers from accessing their accounts for disputing unauthorized charges.

Fortnite players have been complaining about the lack of a refund option, confirm button for purchase, and other problems for years now. With the FTC’s actions, Epic Games will need to refund these customers for their accidental purchases and unauthorized charges. This will also be an example for other game developers to ensure strong privacy protection laws and move away from predatory monetization tactics that trick the playerbase.

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