Fortnite, Gears of War and Epic Games, the developer of Unreal Engine, have been fined record breaking amounts by the Federal Trade Commission to settle complaints related to microtransactions, child-protection guidelines and microtransactions in the popular battle royale game.
In total, Epic is ordered to pay $520 million USD (£426 million GBP) to resolve two separate complaints, one a court order from the Department of Justice, issued regarding a claim that the developer breached the Children’s Online Privacy Protection Act (COPPA), and the other an administrative order relating to “dark patterns” which the FTC says were used to “dupe millions of players into making unintentional purchases.”
“Epic will pay $245 million to refund consumers for its dark patterns and billing practices,” the Commission explains, “which is the FTC’s largest refund amount in a gaming case, and its largest administrative order in history. It has used a variety dark patterns to get consumers of all ages to make in-game purchases that were not intended.
“Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button. Players could be charged if they tried to wake the game while it was in sleep mode or pressed another button to view an item. These tactics led to hundreds of millions of dollars in unauthorised charges for consumers.”
The administrative order related to “dark patterns” will “prohibit” Epic from “charging consumers without obtaining their affirmative consent.” The $245 million paid by Epic will be used to offer refunds to customers. FTC also accused Epic of blocking Fortnite accounts belonging to customers who requested refunds in the previous.
“The FTC alleged that Epic locked the accounts of customers who disputed unauthorised charges with their credit card companies,” the Commission says. “Consumers whose accounts have been locked lose access to all the content they have purchased, which can total thousands of dollars. Even when Epic agreed to unlock an account, consumers were warned that they could be banned for life if they disputed any future charges.”
In a separate ruling, Epic is ordered to pay a $275 million penalty for violating the COPPA Rule – the largest penalty ever obtained for violation of an FTC regulation. The Commission says that Fortnite’s default in-game privacy settings”put children and teens at risk,” and that Epic collected personal information from players who were under 13 years of age.
“Epic’s settings enable live on-by-default text and voice communications for users,” the FTC says. “The FTC alleges that these default settings, along with Epic’s role in matching children and teens with strangers to play Fortnite together, harmed children and teens. Bullying, harassment, threats, and exposure to potentially dangerous and traumatising issues, such as suicide, have occurred among children and teens.
“Epic was aware that many children were playing Fortnite — as shown through surveys of Fortnite users, the licensing and marketing of Fortnite toys and merchandise, player support and other company communications — and collected personal data from children without first obtaining parents’ verifiable consent. The company also required parents who requested that their children’s personal information be deleted to jump through unreasonable hoops, and sometimes failed to honour such requests.”
As well as deleting the information gathered in violation of COPPA rules, Epic is ordered by the FTC to create a new privacy program addressing the Commission’s issues, and submit to regular, independent audits. The FTC says it will publish the new consent agreement in the Federal Register “soon.”
