Epic Games Agrees to Pay Record $520 Million Settlement Over Alleged Children’s Privacy Violations in Fortnite

Epic Games Agrees to Pay Record $520 Million Settlement Over Alleged Children's Privacy Violations in Fortnite

North Carolina-based game developer Epic Games has agreed to pay a record $520 million settlement to resolve charges brought by the Federal Trade Commission (FTC) that it violated children’s privacy, exposed them to potential harassment, and tricked players of all ages into making unwanted in-game purchases.

The company, known for its popular online video game Fortnite, is accused of collecting personal data from children without obtaining the consent of their parent or guardian, as well as exposing children and teenagers to bullying, threats, harassment, and potentially harmful or traumatizing content through the game’s default live voice and text function.

FTC has claimed that these tricks were made possible by Epic Games’ “counterintuitive, inconsistent, and confusing” button configuration. These create “dark patterns” that helped Epic Games earn millions of dollars in the form of unauthorized charges.

Epic has been allegedly pairing children and teens with strangers that have exposed them to “dangerous and psychologically traumatizing issues” this lack of parental control has been a cause of major concern even before.

“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” said Samuel Levine, the director of FTC’s Bureau of Consumer Protection

In a statement, officials from Epic said it “accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”

The settlement marks a significant penalty for a company that was valued at $32 billion and generated over $8 billion in revenue from Fortnite alone between 2018 and 2019.

However, at the same time:

“No developer creates a game with the intention of ending up here,” said the officials at Epic Games.

“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,” Epic Games’ officials further elaborated.

In order to rectify its mistakes, Epic Games has announced that it’s committing to overhauling its privacy policies along with chat and text functions in order to ensure a better environment for its players. The tech giant is also committing to reforming how it charges in-game users.

Furthermore, the fine has been split into two compartments where the first $245 million fine is against the in-game store and refund system, and the latter $275 million file is to cater to the child privacy issues.

In conclusion, the settlement serves as a reminder of the importance of protecting children’s privacy online and the consequences companies face for failing to do so.

Luckily, Riot Games seems to have been focusing on controlling their current system way ahead of Epic games, so they haven’t been the target of such lawsuits, even though League of Legends is plenty in terms of toxicity.

If you’ve judged yourself to show toxic tendencies within a game, then check out our What makes a game so toxic guide!

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