The US Federal Trade Commission (FTC) announced that it has fined Epic Games up to $ 520 million.
According to the FTC, Epic is subject to this penalty for violating the Children’s Online Privacy Protection Act (COPPA) in the game Fortnite. More specifically, the agency alleges that Epic used invasive default settings to trick young players into making unintentional purchases.
Of the fines, $275 million was the penalty Epic had to pay for violating COPPA. That’s the biggest penalty among those paying the FTC. Epic also had to pay $245 million in user refunds because of the vaguely cumbersome payment method. This is the largest refund required by the FTC.
The FTC said that Epic did not receive verifiable parental consent, even though it knew that children were playing Fortnite. Epic Game’s default setting when submitting a complaint also enables text and voice chat unless the user disables them. This leaves kids playing games vulnerable, especially when paired with strangers who bully, harass, and threaten.
The FTC also says that Epic used a confusing user interface to trick players into making unintended purchases. It also charges account holders without authorization (meaning parents whose children charge credit cards without their consent) and blocks the accounts of users who object to the charges.
In addition to the fines, the FTC has proposed a ban on Epic from enabling voice and text chat for children and teens without parental consent.
Epic Games responded to the ruling in a post: “The law hasn’t changed, our app has evolved out of line with longstanding industry practice. We accept this agreement because we want Epic to preserve user protection and provide the best player experience. Over the past few years, we’ve made changes to ensure the ecosystem meets the expectations of players and regulators, which we hope will serve as a useful guide for others in the industry. branch”.
Epic has shown all the changes it has made to Fortnite since the game was released. Basically the accounts are protected as well as the default settings are less intrusive. Epic Games is also currently embroiled in a legal battle with Apple over how it divides costs in its App Store. Apple also filed an FTC fine in 2014 for allowing children to make purchases without parental consent.
FTC Chairwoman Lina M. Khan said in a statement: “Protecting children from invasions of online privacy is a top priority for the Commission and these enforcement actions show businesses. It is clear that the FTC is cracking down on these illegal practices.”
Epic isn’t the only unit in the FTC’s sights. The Commission is currently investigating Microsoft’s acquisition of Activision Blizzard. They are skeptical about whether the acquisition will negatively affect Microsoft’s competition. The UK’s Competition and Markets Authority also expressed concern over this issue.