FTC Closes Epic’s $245M Agreement Over Sketchy Fortnite Purchases

The Federal Trade Commission this week fined Epic Games $245 million and ordered the Fortnite developer to compensate consumers who unknowingly made purchases from its digital store. The deal, first announced in December, is now complete.

“Fortnite’s counterintuitive, inconsistent, and confusing button configuration resulted in players incurring unwanted charges based on a single button press,” the FTC wrote in the announcement. The complaint also criticized Epic for allowing underage gamers to seamlessly make unauthorized purchases without opting out of their parents.

The $245 million settlement — a huge number, but one that doesn’t beat the regulator’s $5 billion fine against Facebook in 2019 — will be used to refund customers. The FTC order will also require Epic to stop using “digital design tricks” like dark pattern design, obtain positive consent for digital purchases, and prevent the company from suspending the accounts of customers who charge fees for digital goods and services contest

The latest settlement, now finalized, follows another massive $275 million in fines the agency proposed in December over the company’s handling of accounts for Fortnite players under the age of 13. The FTC alleged that Epic violated the Children’s Online Privacy Protection Act (COPPA) by collecting full names and contact information from children without parental consent. That settlement also cited Epic’s decision to launch Fortnite with no parental controls and special protections for the young users who make up a large portion of its player base.

“The Department of Justice takes its duty to protect consumers’ privacy rights very seriously,” Deputy Attorney General Vanita Gupta said earlier of the dual settlements. “This proposed order sends a message to all online providers that collecting personal information from children without parental consent will not be tolerated.”

In early December, just before the FTC announcement, Epic announced it would be introducing a new account type designed to protect younger gamers. This feature called “Cabined Accounts” has been added to Fortnite, Rocket League and Fall Guys – three of the game publisher’s popular online multiplayer titles.

“All players worldwide are asked to enter their date of birth when logging in,” Epic wrote in a blog post at the time. “If someone indicates that they are under 13 or the digital consent age of their country, whichever is higher, their account will become a Cabined account and they will be asked to provide a parent or legal guardian’s email address to begin the parental consent process.” Until they receive parental consent, chat, digital purchases, and some other cabin account features are disabled.

Protections based on users self-reporting their own age are an imperfect solution at best. But gaming and social media companies have yet to develop systems that take care of child safety (and the resulting regulatory risks) while still allowing young users access to the online virtual spaces they inevitably spend time in become.

Epic games like Fortnite are already well established among young users, but the company appears to be doubling down on the youngest subset of these players. Last year, Epic announced a partnership with LEGO to create “an immersive, creatively inspiring and engaging digital experience for kids of all ages to enjoy together” – a metaverse collaboration that could rival rival Roblox.