US Slaps Record Fine on Fortnite Creator for Alleged Children’s Privacy Violations

“Fortnite” maker Epic Games will pay $520 million to settle charges of illegally collecting children’s personal information and tricking people into making purchases, the Federal Trade Commission and the company said Monday.

It will pay a record fine of $275 million for violating the Children’s Privacy Law and adopting stronger default privacy settings for young people. The FTC said Epic Games would pay $245 million to refund consumers duped by so-called “dark patterns” that they didn’t intend to make.

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

The announcement comes as the agency has taken a more muscular role in policing the gaming industry, announcing last week a complaint against Microsoft over its $69 billion bid to acquire Activision. Epic said in a statement on Monday that it had eliminated pay-to-win and pay-to-progress mechanics when two players compete against each other and that it had eliminated random item loot boxes in 2019. It also said that it was putting into place an explicit yes/no choice to save payment information.

It said that players could seek refunds via credit cards. “If a cardholder sees an unauthorized transaction on their statement, they may report it to their bank to have it reversed,” the company said in its statement. To protect children, Epic said it has added easy-to-access parental controls and an option to allow parents to authorize purchases and limit daily spending for children under 13. That will include Built-in features like PIN requirements.

The FTC said that Epic employees had raised concern about the company’s default settings in place for children, saying that people should be required to opt-in for voice chat. The FTC said that voice and text chat must be turned off by default.

Children’s privacy advocates were pleased with the settlement, with Jeff Chester of the Center for Digital Democracy saying that “kids should also have their data privacy rights better respected through this enforcement of the federal kids’ data privacy law (COPPA).”