Epic to pay FTC $520M over Fortnite's shop and privacy practices

Epic Games reached a settlement with the FTC, in which the Fortnite developer will pay $520 million to the US trade commission. 

The hefty payment is being made to "resolve concerns related to past designs of the Fortnite item shop and refund systems in Fortnite," following allegations that Epic's famous game violated the Children's Online Privacy Protection Act (COPPA). Per the allegations, Epic deployed several design tricks in order to "dupe millions of players into making unintentional purchases."

$245 million of that payment, according to Epic, will be distributed by the FTC to the developer's customers. The other $275 million will go right to the FTC to address the children's privacy-related concerns.

Among the violations stated by the FTC, Epic allegedly failed to notify parents that it was collecting personal data from young Fortnite players. It also reportedly implemented a system where players could be charged money while waking Fortnite from sleep mode or in a loading screen. Complaints were made by parents and players, which Epic reportedly ignored. 

Along with the FTC fee, Epic will also be prohibited from charging players without asking for clear and explicit consent. The developer has already changed Fortnite's default privacy settings, making it so that voice and text chat are automatically turned off by default for players under 18.

In a statement from the FTC, chair Lina Khan wrote that Epic "used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children. "These enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices.”

Associate Attorney General Vanita Gupta added that the actions against Epic will "send a message to all online providers that collecting children’s personal information without parental consent will not be tolerated.”

The FTC is cracking down on unsafe business practices for kids

Epic, in its own separate statement, confirmed that it would comply with the FTC's orders, and said it's already improved the in-game payment flow. Now, players have to hold down a button to buy something in the in-game shop, as a way of reconfirming that a player wants to buy something. 

As a further method of protecting young players, Epic recently launched "cabined accounts," which disables (among other things) in-game chat and purchases for players younger than 13 who don't have their accounts verified by a parent or guardian. 

Last week, seven Democratic members of Congress called on various game publishers, Epic included, to release their findings related to extremist behavior in popular online games such as Apex Legends and Fortnite. 

Using the Anti-Defamation League's recent findings about the continued rise of white supremacy in game communities, those Congress members also called for a regular transparency report from game publishers regarding in-game reporting, how such extremist behavior can be recognized, and the various ways players can report harassment.

Update: This post has clarified that Epic had already changed Fortnite's privacy settings prior to the publication of Epic's news post about its compliance with FTC regulations.