The US Federal Trade Commission has hit Fortnite maker Epic Games with a record-breaking penalty of $520m (£427m) over allegations it previously employed “lax privacy practices” for voice and text chat, and used design tricks to “dupe millions of players”. into unintentional purchases.
The eye-opening judgment includes the largest-ever settlement obtained by the FTC regarding the US Children’s Online Privacy Protection Act, as Fortnite allowed in-game chat and user data collection by default.
Fortnite holds a “Teen” rating by the US ratings board ESRB, but the FTC has argued Epic Games knew many of its users were likely under 13 years of age and had not obtained their parents’ consent.
The remainder of the fine relates to a separate decision by the FTC that Fortnite included “illegal dark patterns” to “trick players into making unwanted purchases and let children rack up unauthorized charges without any parental involvement”.
The FTC claims Fortnite applied “counterintuitive, inconsistent and confusing button configuration” design which let users purchase things accidentally. Pre-2018, it was too easy for children to purchase in-game currency without parental consent, the FTC continued. Another point of criticism was that Epic Games had locked the accounts of customers who used their credit cards to subsequently charge back purchases – some of which were in the thousands of dollars.
Epic Games has responded with its own detailed statement on the settlement, laying out how it has evolved Fortnite over the years and how it believes the FTC has used “statutes written decades ago” to target “long-standing industry practices” that it nonetheless now agreed were “no longer enough”.
“We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players,” Epic Games wrote. “Over the past few years, we’ve been making changes to ensure our ecosystem meets the expectations of our players and regulators, which we hope will be a helpful guide for others in our industry.”
Epic Games’ statement highlights changes it has put in place over the past four years to address the FTC’s concerns – including a refund token system (added in May 2018) and a more recent undo purchase system. More recently still, the game now requires you hold a button to purchase to confirm intent.
As for the FTC’s child privacy concerns, Epic pointed to its recent launch of Cabined Accounts for children under 13 – a type of Epic Account where certain features such as chat and purchasing are not available.
“No developer creates a game with the intention of ending up here. The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount,” Epic Games wrote. Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough.
“The old status quo for in-game commerce and privacy has changed, and many developer practices should be reconsidered. We share the underlying principles of fairness, transparency and privacy that the FTC enforces, and the practices referenced in the FTC’s complaints are not how Fortnite operates,” Epic Games concluded. “We will continue to be upfront about what players can expect when making purchases, ensure cancellations and refunds are simple, and build safeguards that help keep our ecosystem safe and fun for audiences of all ages.”