Epic Games Pays Out Over 500 Million USD In FTC Settlement Over Fortnite

Epic Games has reached a settlement with the Federal Trade Commission (FTC) in the US, being made to pay over 500 million USD in two separate settlements over inadequate protections for children in Fortnite.

In a statement on their website, the FTC goes into detail the exact nature of the complaints and violations brought on by the game.

Voice Chat And Data Collection

The first settlement is over Epic Games violations of the Children’s Online Privacy and Protection Act (COPPA), which sees the company paying 275 million USD to the FTC for endangering children.

It comes via a proposed federal court order by the Department of Justice, on their behalf.

The commission specifically cites the on-by-default voice feature as being one of the biggest violations- allowing children to speak to anyone online, opening the floodgates to harassment and more.

“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. Children and teens have been bullied, threatened, harassed, and exposed to dangerous and psychologically traumatizing issues such as suicide while on Fortnite”, they said in a statement on their website.

It also mentions that Epic Games had continued to collect data on children despite that being one of the biggest points of COPPA- and paints a scenario in which Epic Games intentionally obfuscated tools for parents to request Epic Games delete the data.

Epic has released their own statement on the settlement, alleging that they had actually been compliant with COPPA standards, though sparse on details.

For example, while going on about the advanced tools for protecting children via text chat, it does not address the actual COPPA complaint- that voice chat was still on by default and children were using it.

Refunds For Children’s Purchases

The second FTC complaint sees Epic Games paying 245 million USD in refunds to customers, following “Dark Patterns” and a lack of secure tools to stop children from spending parents money.

“Epic ignored more than one million user complaints and repeated employee concerns that “huge” numbers of users were being wrongfully charged. In fact, Epic’s changes only made the problem worse, the FTC alleged. Using internal testing, Epic purposefully obscured cancel and refund features to make them more difficult to find”, the FTC says.

Epic Games implies the blame is on the platforms themselves, saying that “on platforms where Epic processes payments”, they had been giving adequate tools for refunds.

To their credit, this issue isn’t unique to Fortnite- almost every popular game with in-app purchases seems to run into the same problem, with children simply using their parents’ credit cards to buy premium currency such as was the case with Genshin Impact last year.