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The Federal Trade Commission (FTC) has hit the makers of Fortnite with a hefty half-a-billion-dollar settlement to resolve a pair of civil complaints.
Epic Games will pay a $275m (£225.9m) penalty for violating children’s privacy law and a further $245m (£1997.6m) in refunds for tricking users into making unwanted charges, according to the FTC's website.
The record-breaking settlements come to a total of $520m (£452.9m) after the company allegedly broke the Children’s Online Privacy Protection Act (COPPA) by collecting information from players under 13 without their parent's consent.
They also reportedly enabled real-time voice and text chat, leading to children being "bullied, threatened, harassed and exposed to dangerous and psychologically traumatizing issues such as suicide."
Epic Games were also said to have used "dark patterns to trick users into making purchases" and charged account holders without authorisation. Claims also suggested the company blocked accounts that tried to dispute the unauthorised charges.
Going forward, the FTC said the gaming company must adopt strong privacy default settings for children and teens, ensuring that voice and text communications are turned off by default.
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"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."
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Epic Games has since released a statement confirming the settlement to "resolve concerns related to past designs of the Fortnite item shop and refund systems in Fortnite, which the FTC will use to distribute to Epic customers at their discretion."
They wrote: "No developer creates a game with the intention of ending up here. The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount.
"Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough.
"We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.
They added: "Over the past few years, we’ve been making changes to ensure our ecosystem meets the expectations of our players and regulators, which we hope will be a helpful guide for others in our industry."
Who will be eligible for a refund?
The FTC plan on refunding the following:
- "Parents whose children made an unauthorized credit card purchase in the Epic Games Store between January 2017 and November 2018"
- "Fortnite players who were charged in-game currency (V-Bucks) for unwanted in-game items (such as cosmetics, llamas, or battle passes) between January 2017 and September 2022"
- "Fortnite players whose accounts were locked between January 2017 and September 2022 after disputing unauthorized charges with their credit card companies."
How to get a refund?
The FTC will have more information about the refund system soon.
They plan to release updates here and email updates to those who have paid for in-game purchases.
To stay in the loop, bookmark FTC.gov/Fortnite, or sign up to get email updates.
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