Fortnite maker Epic Games hit with $520 million fine for allegedly violating children’s privacy

Fortnite creator Epic Games will pay $520 million (roughly Rs 4,305 crore) to settle allegations that it illegally collected personal information of children and tricked people into making purchases, the Federal Trade Commission and the company said on Monday.

It will pay a record fine of $275 million (roughly Rs. 2,300 crore) for violating a child privacy law and adopt strict default privacy settings for young people. Epic Games will also pay $245 million (roughly Rs. 2,000 crore) to refund users who were tricked by so-called “dark patterns” into making purchases they didn’t intend to make, the FTC said.

“Epic used privacy-infringing default settings and deceptive interfaces that misled Fortnite users, including teenagers and children,” FTC Chair Lina Hahn said in a statement.

The announcement comes after the agency took a more active role in policing the gaming industry, announcing last week a complaint against Microsoft over its $69 billion (roughly Rs 6 lakh crore) bid to acquire Activision.

Epic said in a statement on Monday that it has eliminated the pay-to-win and pay-to-progress mechanics when two players compete against each other, and that it has eliminated random item loot boxes in 2019. It also said it is putting in put a clear yes/no choice to save the payment information.

It said players can seek refunds through credit cards. “If a cardholder sees an unauthorized transaction on their statement, they can report it to their bank to reverse it,” the company said in a statement.

To protect children, Epic said it has created features such as easier-to-access parental controls and a PIN requirement to allow parents to authorize purchases and a daily spending limit for children under 13.

The FTC said Epic officials raised concerns about the company’s default settings for children, saying people should be required to opt in for voice chat. The FTC said voice and text chat should be turned off by default.

Children’s privacy advocates were pleased with the settlement, with Jeff Chester of the Center for Digital Democracy saying that “children’s data privacy rights should also be better respected through this implementation of the federal Children’s Data Privacy Act ( COPPA).’

© Thomson Reuters 2022