Yesterday the Federal Trade Commission [FTC] announced that it has reached a pair of settlements with Epic Games, the creator of the ultra popular video game “Fortnite,” after alleging that the company had violated the Children’s Online Privacy Protection Act (COPPA) and deployed design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases. The two settlements total a whopping figure of $520 million.
The FTC alleged that Epic violated COPPA by gathering personal data from children under the age of 13 without first obtaining verifiable parental consent. Epic will have to pay $275 million in what is now the largest penalty ever obtained for violating an FTC rule. In addition, Epic was also alleged to have placed children and teens at risk through their default settings. These default settings, and Epic’s part in pairing children and teens with strangers to play Fortnite together, harmed children and teens by exposing them to online bullying and harassment.
The second settlement includes a penalty of $245 million which will be used to refund customers that were tricked or misled by Epic’s deceptive interface and use of dark patterns. These deceptive practices, as alleged by the FTC, were aimed at getting consumers of all ages to make unintended in-game purchases. Most concerning is the fact that since 2018 children have been able to purchase Fortnite’s in-game currency, also known as “V-Bucks,” by simply pressing buttons without providing any parental or card holder action or consent.
It is clear that the FTC has been paying close attention to the video game industry and specifically those games with a younger, more vulnerable demographic. The crackdown on these games is evident through FTC Chair Lina M. Khan’s statement reiterating the idea that “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.” It will be interesting to see how the the video game industry as a whole will respond to these two settlements.
Source(s)
Staff, the P.N.O. and Staff, D.P.I.P.and C.T.O. (2022) Fortnite video game maker Epic Games to pay more than half a billion dollars over FTC allegations of privacy violations and unwanted charges, Federal Trade Commission. Available at: https://www.ftc.gov/news-events/news/press-releases/2022/12/fortnite-video-game-maker-epic-games-pay-more-half-billion-dollars-over-ftc-allegations (Accessed: December 20, 2022).
