Epic Games settles $520 million FTC complaints over unwanted Fortnite purchases, privacy violations

Epic Games settles $520 million FTC complaints over unwanted Fortnite purchases, privacy violations

The FTC accused Epic Games of violating children’s privacy and allowing unwanted charges in Fortnite.

The Federal Trade Commission and Epic Games have reached a combined $520 million settlement regarding two separate violations. The first involves a record-breaking $275 million civil penalty for alleged violations of the Children’s Online Privacy Protection Act. This appears to be directly related to the randomly added Epic Games Store parental controls that were introduced earlier this month.

According to the FTC, “a substantial number of the 400 million people who play Fortnite are kids under 13, and through its registration process, Epic collected kids’ personal information – including their full names, email addresses, and usernames – without getting their parents’ consent.”

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Epic Games

The FTC alleges that Epic launched Fortnite with no parental controls and minimal privacy settings. Instead, the company included one paragraph toward the end of a lengthy Privacy Policy, disavowing that it was kid-directed. However, the company’s own internal communications demonstrated that it was, in fact, geared toward children.

Unauthorized Fortnite purchases

The other complaint alleges that Epic set up its payment system so that credit card information was saved by default. This meant that kids could purchase V-Bucks – Fortnite‘s virtual in-game currency – with the press of a button without needing separate cardholder consent information like a CVV number.

This did not just impact children. In fact, over a million complaints were lodged over unauthorized purchases within Fortnite. Epic used a combination of a “no refund” policy for certain purchases and penalties for chargebacks. In addition, the FTC says Epic “deliberately requires consumers to find and navigate a difficult and lengthy path to request a refund through the Fortnite app.”

Fornite Unreal Engine 5.1

If users disputed unauthorized charges with their credit card companies, the FTC complaint alleges that Epic Games locked Fortnite accounts. This denied consumers access to merchandise that they purchased that was not subject to the credit card dispute. Some users spend hundreds of dollars on the game.

Intentionally poor design

The FTC complaint makes it clear that Epic Games used intentionally poor design practices to encourage unwanted purchases. For example:

Another dark pattern alleged in the FTC’s lawsuit is Epic’s design of in-game purchases in a way that made it easy for an inadvertent button push to lead to unwanted charges. For example, for users playing Fortnite on the small screen of a smartphone, the company placed the button to preview merchandise very close to the purchase button. The upshot: One misaligned click by a user still in the window shopping phase and Epic immediately deducted the cost of the item from the player’s V-Bucks balance. Users also reported unwanted purchases when the game was waking from sleep mode or in a loading screen.

What’s more, the FTC says Epic used inconsistent and often counterintuitive designations for the buttons, an alleged digital dark pattern that also led to unauthorized charges. For example, when playing Fortnite using the PlayStation controller, the button to preview merchandise has a cross on it while the button to buy certain items has a square. But for other items, those functions are reversed. Users who press the square can preview items, but users who press the cross are charged.

What’s next for Epic Games and Fortnite?

The proposed FTC settlement would put Epic Games under a consent agreement that “mandates an overhaul of the company’s billing and dispute practices and bars the use of dark patterns to get consumers’ consent. Once the proposed settlement is published in the Federal Register, the FTC will accept public comments for 30 days.”

Players can expect new parental controls. Anyone under the age of 13 will need to get parental permission for many features including voice chat. Fortnite recently underwent massive changes with a new game engine. Unreal Engine 5.1 arrived to offer a boost in performance, graphics, and new physics.

What do you think of the news that Epic Games settled with the FTC over violations within Fortnite? Let us know!