Epic Games has agreed to a settlement with the Federal Trade Commission (FTC) worth $520 million.
The company will have to pay the sum after allegations that it violated the Children’s Online Privacy Protection Act (COPPA).
Additionally, the FTC says the company used dark patterns to trick millions of users into unintentional purchases.
Epic’s settlement is broken out into two separate, record-breaking payments. First, the company must pay a $275 million monetary penalty for breaking COPPA.
The additional $245 million will be allocated to refunding customers affected by its “dark patterns and billing practices.”
“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,” reads a statement from FTC Chair Lina M. Khan.
In addition to monetary settlements, the FTC requires that Epic adopt stronger privacy settings by default.
That means voice chat, text chat, and other social features will be turned off by default and require parental consent to turn on.
The FTC also says Epic must change its purchasing systems, so they are no longer confusing, with shifting layouts designed to mislead.
What rules did Epic break?
The FTC goes into further detail on the broken rules and regulations that led to this settlement with Epic. The violation of COPPA involves gathering children’s data without parental consent.
COPPA requires parental consent before a company can collect any personal data on children. Epic also allegedly made it difficult for parents to have their children’s personal data deleted.
The accusations of dark patterns are solely related to Epic’s in-game Fortnite shop. The company is accused of having misleading, ever-changing menus that lead to unintentional user purchases.
Until 2018, Epic also let users make V-Bucks purchases with just the press of a button, requiring no authorization for the saved credit card. As you can imagine, this cost many parents a lot of money.
A long list of infractions led to this massive $520 million settlement. And these will be things that Epic will surely clear up as soon as possible to avoid potential problems in the future.
But $520 million is pocket change for Epic Games. Fortnite made the company around $5.8 billion last year, so it can handle this settlement with little trouble.
Still, Epic will want to avoid any settlements like this going forward. Expect Fortnite to become safer for kids and less deceitful in its shop soon.
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