Epic Games must pay a total of $520 million in relief over allegations that the Fortnite maker 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, according to a press release from the FTC that explains how the action actually involves two separate record-breaking settlements: 1) a $275 million penalty for violating children’s privacy law and changing default privacy settings, and 2) $245 million in refunds for tricking users into making unwanted charges.
As part of a proposed federal court order filed by the Department of Justice on behalf of the FTC, Epic will pay a $275 million monetary penalty for violating the COPPA Rule—the largest penalty ever obtained for violating an FTC rule. Additionally, in a first-of-its-kind provision, Epic will be required to adopt strong privacy default settings for children and teens, ensuring that voice and text communications are turned off by default. Under a separate proposed administrative order, Epic will pay $245 million to refund consumers for its dark patterns and billing practices, which is the FTC’s largest refund amount in a gaming case, and its largest administrative order in history.
Privacy Violations
- Violated COPPA by Failing to Notify Parents, Obtain Consent
- Default settings harm children and teens
Illegal Dark Patterns
- Used dark patterns to trick users into making purchases
- Charged account holders without authorization
- Blocked access to purchased content
Dark patterns, otherwise known as deceptive design patterns, are described as a user interface design technique that is intentionally crafted to trick users into doing things they probably don’t want, such as buying overpriced items.
“As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,” said FTC Chair Lina M. Khan. “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.”
“The Justice Department takes very seriously its mission to protect consumers’ data privacy rights,” said Associate Attorney General Vanita Gupta. “This proposed order sends a message to all online providers that collecting children’s personal information without parental consent will not be tolerated.”
“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,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “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.”
Beyond Fortnite, Epic Games is widely known as the company behind Unreal Engine, which is now in its fifth iteration and touted as being the world’s most open and advanced real-time 3D creation tool.
The Witcher 4, Kingdom Hearts 4, and the new Tomb Raider are just a few of the games that are being developed using Unreal Engine 5.