The maker of the popular online video game Fortnite has agreed to pay a record settlement to resolve charges it violated children's privacy, exposed children and teenagers to potential harassment, and duped players of all ages into making unwanted in-game purchases.
The Federal Trade Commission announced Monday that North Carolina-based Epic Games will pay a total of $520 million to settle allegations that it collected personal data from children without first obtaining the consent of their parent or guardian.
Epic is also accused of exposing children and teenagers to bullying, threats, harassment and dangerous and psychologically traumatizing issues such as suicide while using Fortnite through the game's default live voice and text function.
And players of all ages were tricked into buying online credits via what the FTC called "counterintuitive, inconsistent, and confusing" button configuration, a phenomenon known as "dark patterns" that allegedly earned Epic hundreds of millions of dollars in unauthorized charges to consumers.
As part of the settlement, Epic neither confirmed nor denied the allegations, though it has agreed to overhaul its privacy policies and chat and text functions, as well as reconfigure how it charges game users.
“Epic put children and teens at risk through its lax privacy practices, and cost consumers millions in illegal charges through its use of dark patterns,” Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, said in a statement. “Under the proposed orders announced today, the company will be required to change its default settings, return millions to consumers, and pay a record-breaking penalty for its privacy abuses.”
In a statement on its website, Epic acknowledged the settlement.
"No developer creates a game with the intention of ending up here," it said in part. "The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount. 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. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players."
According to The Wall Street Journal, Epic was most recently valued at $32 billion. "Fornite" alone made $5.5 billion in 2018 and $3.7 billion in 2019, and enjoys nearly 400 million users worldwide, according to documents reviewed by the games site IGN.