Monday’s announcement by the Federal Trade Commission involved Epic Games, the developer and publisher of popular video games such as Fortnite and Fall Guys. The settlement covers $520 million in claims that Epic Games illegally collected data from children and tricked millions into making unintentional purchase.
Record penalties will be assessed in two separate cases as part of the deal.
Epic agreed to pay $275 million to settle regulators’ accusations that it violated a federal law, the Children’s Online Privacy Protection Act, by collecting personal information from children under 13 who played Fortnite without obtaining verifiable consent from a parent. The company also made parents “jump through hoops” to have their children’s data deleted and sometimes failed to honor parents’ deletion requests, the agency said in a legal complaint filed on Monday.
The amount dwarfs the $170 million penalty — the previous record for child privacy violations — that Google agreed to pay in 2019 over accusations that it illegally harvested data from children on YouTube and used it to target them with ads.
Epic will be required to use high-privacy default settings as part of the settlement. The company will have to disable settings that allow live text and voice chats for children.
Epic also agreed to pay $245 million to refund consumers over accusations that it used manipulative online practices, known as “dark patterns,” to trick users of all ages into making unintended purchases. Among other things, Fortnite’s user interface had a “counterintuitive, inconsistent and confusing” layout that led users to incur charges with the press of a single button, regulators said in a separate complaint.
The complaint stated that players could be charged if they attempted to activate the game in sleep mode or when it was loading a screen. Children ended up racking up unauthorized charges without their parents’ knowledge. These dark patterns led to unwelcome charges of hundreds of millions for users.
This is an ongoing story. Keep checking back for more updates.
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