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FTC Hits Epic Games With $520m Fine and Refund Order  

December 20, 2022

The Federal Trade Commission has ordered video game company Epic Games to pay a total of $520 million in penalties and refunds, after complaints involving the privacy of children and tricking players into making purchases. 

The regulator found Epic Games, which makes the popular video game Fortnite, had violated the Children’s Online Privacy Protection Act (COPPA) and used design tactics known as dark patterns to cause millions of players to make unintended purchases. Epic will pay a $275 million penalty for breaching the COPPA Rule and must pay customers $245 million in refunds. 

“As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,” FTC Chair Lina M. Khan said in a statement. “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.”

Epic’s most popular video game, Fortnite, has more than 400 million users worldwide. The game is free to download and play but players are able to use real money to make in-game purchases of items such as dance moves and player skins. 

Dark patterns are online methods used to prompt users to do something they didn’t intend to do. The FTC complaint noted Fortnite’s “counterintuitive, inconsistent, and confusing button configuration” led to players incurring unwanted charges with a single press of a button. For example, players could incur charges while waking the game from the sleep mode, while the game was loading, or by pressing a nearby button while trying to preview an item.

The $275 million penalty for violating the COPPA rule is the largest ever handed out for a violation of an FTC rule. Epic Games will also be required to adopt strong default privacy settings for childrens and teens in the future. 

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Filed Under: Consumer, North America, Top Story

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