The FTC said this is the largest penalty ever for violating its rules and includes its largest refund amount in a gaming case.
Epic Games has agreed to pay $520m over allegations that it breached children privacy laws and tricked players into making unintentional purchases.
The allegations came from the US Federal Trade Commission, which claims the company collected personal information from children who played Fortnite without getting parental consent.
The company will pay $275m for violating the Children’s Online Privacy Protection Act. The FTC said this is the largest penalty ever obtained for violating its rules.
Under a separate order, Epic Games will also pay $245m to refund consumers for its “dark patterns and billing practices”, which is the FTC’s largest refund amount in a gaming case.
The commission said Epic Games deployed a variety of practices to dupe players into making unintentional purchases, such as an inconsistent and confusing button configuration.
The FTC said players could accidentally make a purchase when trying to wake the game from sleep mode or preview an item, leading to “hundreds of millions of dollars in unauthorised charges for consumers”.
“Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,” said FTC chair Lina M Khan.
“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 a first-of-its-kind provision, the FTC said Epic Games will also have to adopt strong privacy default settings for children and teens, ensuring that voice and text communications are turned off by default.
In a statement, the game company said it accepted the settlement because it wants to be at “the forefront of consumer protection”.
“No developer creates a game with the intention of ending up here,” Epic Games said. “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 longstanding industry practices are no longer enough.”
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