Epic Games, the developer of Fortnite, Gears of War and Unreal Engine, has been hit with record fines by the Federal Trade Commission (FTC) to resolve complaints related to microtransactions and child protection guidelines within the hugely popular battle royale game.
In total, Epic is to pay $520m (£426m) to resolve two separate complaints, one of which stems from a Department of Justice court order over allegations that the developer breached the Children’s Online Privacy Protection Act (COPPA) , and a second administrative order for “dark patterns” that the FTC said were used to “deceive hundreds of thousands of players into making unintended purchases.”
“Epic can pay $245 million to reimburse consumers for its dark patterns and billing practices,” the Commission explains, “which is the FTC’s largest amount reimbursed in a gaming case and the biggest administrative order in history. The company has implemented various dark patterns designed to entice consumers of all ages into inadvertent in-game purchases.
“The counter-intuitive, inconsistent and confusing configuration of buttons in Fortnite has led to players incurring unwanted fees based on pressing a single button. For example, players could get charged when attempting to wake the sport from sleep while the sport was within the loading screen, or by pressing the adjoining button while attempting to preview an item. This tactic has led to lots of of hundreds of thousands of dollars in unauthorized charges to consumers.”
An administrative order related to “dark designs” will “prohibit” Epic from “charging consumers without obtaining their consent.” The $245 million paid by Epic will likely be used to refund customers. In its ruling, the FTC also accuses Epic of blocking the Fortnite accounts of customers who’ve made refund requests prior to now.
“The FTC claimed that Epic blocked the accounts of customers who disputed unauthorized charges with their bank card firms,” the commission says. “Consumers whose accounts have been banned lose access to all purchased content, which may cost 1000’s of dollars. Even when Epic agreed to unblock the account, consumers were warned that they might receive a lifetime ban in the event that they dispute any future fees.”
In a separate ruling, Epic is ordered to pay a fine of $275 million for violating the COPPA rule – the very best fine ever obtained for violating FTC regulations. The commission says Fortnite’s default privacy settings “pose a risk to children and teenagers” and that Epic collects personal information from players under the age of 13.
“Epic’s settings allow users to speak live text and voice by default” – FTC says. “The FTC says these default settings, together with Epic’s role in matching children and teenagers with strangers to play Fortnite together, have harmed children and teenagers. While playing Fortnite, children and teenagers have been bullied, bullied, harassed and exposed to dangerous and psychologically traumatic issues equivalent to suicide.
“Epic was aware that many children were playing Fortnite – as demonstrated by Fortnite user surveys, licensing and marketing of Fortnite toys and merchandise, player support, and other company communications – and picked up kid’s personal information without first obtaining verifiable parental consent. The company also required parents who requested removal of their kid’s personal information to hop over unreasonable hurdles, and sometimes didn’t comply with such requests.
In addition to removing information collected in violation of COPPA rules, the FTC is ordering Epic to create a recent privacy program to handle the Commission’s concerns and undergo regular independent audits. The FTC says it is going to “soon” post the brand new approval to the Federal Register.
