FTC fines Fortnite maker Epic Games $520 million over child privacy charges • Zoo House News
The Federal Trade Commission (FTC) announced Monday morning that it will settle Epic Games for $520 million over child privacy-related charges. Epic Games, which makes popular all-ages games like Fortnite and Fall Guys, has allegedly violated the Children’s Online Privacy Protection Act (COPPA) by using “design tricks called dark patterns to trick millions of players into making unintentional purchases,” the FTC said in a press release.
The $520 million payment is split into two settlements: The COPPA penalty is $275 million, the highest penalty ever for violating an FTC rule. The FTC also suggested that Epic should pay $245 million to reimburse customers for so-called “dark patterns and billing practices.” If Epic Games pays this penalty, it will be the FTC’s largest previous day’s recovery in a gaming case.
In addition to making it too easy for children to make online purchases, the FTC criticized Epic’s live text and voice communication features, which were enabled by default. The FTC alleges that these features have exposed children to harassment and abuse, especially since Epic had no way to ensure that online play did not bring children and adults together. According to the FTC’s press release, children were subjected to bullying, threats, harassment and “psychologically traumatizing things like suicide” during the game.
Over the past two years, Epic has raised over $3 billion in venture capital, most recently with a valuation of $31.5 billion. Together with Lego, whose parent company has invested $1 billion, Epic Games is working to build a kid-friendly metaverse.
Epic Games was also embroiled in a lawsuit with Apple accusing the tech giant of anti-competitive behavior. The video game company questioned Apple’s policy that it can remove products from the iOS App Store if the app redirects customers to checkout within the app, earning Apple a 30% cut.