Epic Games fined over $500 million over unfair micro-transaction practices in Fortnite – IGN

Epic Games will have to pay $520M over “design tricks…to trick millions of players into making unintended purchases” in Fortnite, FTC [FTC] Announce today.

The fine stems from what the FTC calls two separate “record-breaking” settlements. One of them is a $275 million fine for violating children’s online privacy protections [COPPA] that imposes restrictions on websites and online services directed to children under the age of 13. Epic will also have to pay customers $245 million in refunds for its “dark patterns.”

According to the FTC, Fortnite uses “privacy-invasive default settings” and “deceptive interfaces” to “deceive” players.

“Protecting the public, especially children, from invasions of online privacy and dark patterns is a top priority for the commission, and these enforcement actions demonstrate to businesses that the FTC is cracking down on these illegal practices,” said FTC Chair Lena Khan.

These “dark patterns” involve tricking players into making unintended in-game purchases with “unintuitive, inconsistent, and confusing” button configuration, including charging while waking from sleep mode. The FTC also says that account holders could be charged without permission, and that children had racked up “hundreds of dollars” in fees before parents knew what was happening. With that in mind, the FTC says Epic has “ignored more than a million user complaints” about wrongful fees while “intentionally” withholding cancellation and refund features.

Fortnite voice chat settings are also in the crosshairs, Epic responds

In addition to microtransactions, Fortnite voice chat has also been in the crosshairs of the Federal Trade Commission. The FTC claims that Epic employees “urged” the company to change Fortnite’s default settings to require users to engage in voice chat, but the company “resisted” turning the feature off even during “child molestation, including sexual, while playing the game.”

As a result, Fortnite will be required to disable voice and text communications for children and teens under the age of 13, or for parents to provide consent through a privacy setting. Epic must also delete personal information collected from Fortnite users in violation of the COPPA rule, and establish a “comprehensive privacy program”.

Epic posted a lengthy response of its own, saying in part: “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. Laws don’t specify who “How gaming ecosystems work was written decades ago. Laws haven’t changed, but enforcement has evolved and long-standing industry practices can no longer suffice. We accepted this agreement because we want Epic to be at the forefront of consumer protection and delivering the best experience for our players.”

Epic has continued to address the allegations point by point, saying that “all game developers should rethink the steps they’ve taken to streamline payment flows” and noting that it implemented a high privacy default setting in September. Epic has also included what it says is an updated chargeback policy, self-serve refunds, immediate cancellation of cosmetic purchases, and “no random paid item loot boxes since 2019 and absolutely no gambling.”

The fines are further evidence of the FTC’s growing interest in the video game industry, which includes suing to block Microsoft’s attempt to acquire Activision Blizzard. Meanwhile, Epic has been locked in various lawsuits with Apple and Google over issues such as Apple’s 30 percent stake in both apps and in-app purchases.

Fortnite recently launched Chapter 4, which it describes as a “fresh start” thanks to a major graphical overhaul and other updates.

This story has been updated with Epic’s response to the FTC settlements.

Kat Bailey is a senior news editor at IGN as well as co-host of Nintendo Voice Chat. Do you have advice? Send her a direct message at the_katbot.

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