Fortnite creator Epic Games has been ordered by the FTC to pay out an eye-watering $520 million in fines and refunds. Epic's penance appears to be twofold: it's split into fines for violating a major children's privacy law and refunds for engaging in what's known as "dark patterns" to trick users into buying content.
According to the FTC, Epic must pay a $275 million fine for violating the Children's Online Privacy Protection Act, or COPPA. Specifically, the FTC says Epic used "privacy-invasive default settings" that did not adequately protect underage users from privacy invasion online. Compliance with that act is what spurred Epic to introduce cabined accounts to Fortnite earlier this month.
In addition to paying out this staggering sum of money (which is probably a drop in the ocean for Epic, given its size), Epic must also "adopt strong privacy default settings" for children and teenagers in Fortnite, ensuring that voice chat and text comms are turned off by default. To some extent, the new cabined account feature does seem to implement these changes, with underage players needing to set up parental controls to access voice and text chat. That hasn't helped Epic dodge the $275 million fine, though.
As well as the above fines, Epic has been ordered to cough up $245 million in customer refunds for what the FTC describes as "its dark patterns and billing practices". This constitutes the largest refund ever mandated by the FTC, as well as the commission's largest administrative order in history.
If you're unfamiliar with the concept of dark patterns, they're effectively user interface tricks used by software companies to push consumers towards making purchases or decisions they didn't want to make. Examples include "confirmshaming", in which companies use negative wording to shame users into accepting decisions, or "privacy Zuckering", where companies trick consumers into sharing more data than they want to. No prizes for guessing who the second example is named for.
The FTC says Epic engaged in "deceptive interfaces" that tricked Fortnite users, "including teenagers and children", into making unwanted purchasing decisions. FTC Bureau of Consumer Protection director Samuel Levine says Epic "cost consumers millions in illegal charges through its use of dark patterns". You can read the full FTC declaration here if you want to see everything it's accusing Epic of doing. The list is pretty exhaustive.
Epic's response to the FTC's decision has been a little gross
In response to the FTC's decision, Epic posted a blog in which it seemingly attempts to reframe the FTC's conclusions to paint itself in a more positive light. Epic says it's "moving beyond long-standing industry practices", which seems a touch hypocritical given that it's just been fined over $500 million for essentially failing to meet basic common decency and legal obligations.
Epic's had plenty of time to mull over the things it's done with Fortnite, and it's not like this is the first time the company has been in legal trouble over its Fortnite design practices. Back in late 2019, Epic was sued in Canada over Fortnite's addictive qualities, with the lawsuit likening the game to cocaine for children. Even the British Royal Family has weighed in on this debate, with Prince Harry describing Fortnite as "an addiction to keep you in front of a computer for as long as possible".
A report from late 2018 also detailed the case of a boy named Carson, who reportedly played Fortnite for 12 hours straight every day and lost sleep as a result. There have been regular accounts of young players accidentally spending huge amounts of money on Fortnite, too.
Epic says it's reducing the ways in which this is possible in the game, including by introducing daily spending limits for players under 13 and adding hold-to-purchase mechanics. Still, for the company to position itself at the vanguard of some kind of moral imperative to move away from harmful industry practices seems a touch disingenuous. We'll bring you more on Fortnite and the FTC as soon as we get it.