FTC fines Fortnite-maker Epic $520M over children’s data privacy

The Federal Trade Commission of the United States announced on Monday that Fortnite-maker Epic Games will pay $520 million in fines to settle allegations over children’s privacy and its billing practices.

For violating the country’s Children’s Online Privacy Protection Act (COPPA) by collecting the data of children under the age of 13 without informing their parents or getting their consent, the video game developer will pay a $275 million penalty, the largest penalty ever issued for violating an FTC rule.

It will pay another $245 million to refund customers for ‘’its dark patterns and billing practices’’ tricking players into making unwanted purchases. This is also the largest refund amount the FTC has issued in a gaming case.

“As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,” said FTC Chair Lina M. Khan, in a statement. “Protecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the Commission, and these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices.”

In addition to the fines, Epic Games will also be required to make changes to its Fortnite settings which enable voice and text chatting by default, exposing children and teenagers to online hate speech, the government agency said.

‘’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,’’ Epic said in a press release. ‘’We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.’’

The developer said that it now offers users a yes or no option to save their payment info, and re-confirms their purchase intention using a ‘’hold-to-purchase’’ mechanism.

It also added that its new Cabined Accounts feature, which was released earlier this month, now requires players to get parental consent if they’re under 13, or the country’s age of digital consent, to access certain Fortnite features like chatting and making payments.

Earlier this month, the FTC has also sued Microsoft to block its acquisition of Activision Blizzard for $69 billion.