Home SecurityPrivacy Data Collection Costs Epic Games Half a Billion USD

Data Collection Costs Epic Games Half a Billion USD

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According to the FTC, the developer of Fortnite and Fall Guys, Epic Games, deployed design tricks called “dark patterns” and duped millions of players into making unintentional purchases.

The Federal Trade Commission (FTC) has announced to charge Epic Games with a $520 million settlement concerning the alleged violation of the Children’s Online Privacy Protection Act (COPPA). A Canadian court has approved the class-action lawsuit against Epic Games.

What was the Issue?

The FTC press release revealed issues with the online purchases option. Though there’s no certainty that Epic Games intentionally created an addictive game, the possibility cannot be ruled out that the game’s distributor and creator knew about its addictiveness.

Apart from online purchases made by minors, the FTC had shown concern regarding Epic’s live text and voice communication features. These features were enabled by default, which exposed minors to abuse and harassment.

Moreover, Epic Games had no mechanism to ensure that kids and adults wouldn’t match each other when playing online. According to the FTC, children were exposed to bullying and threats, experienced psychological traumas, and became vulnerable to suicidal thoughts.

Fine Details

According to the FTC, the Fortnite and Fall Guys developer deployed design tricks called dark patterns and duped millions of players into unintentional purchases.

As for the $520 million fine, the payment will be divided into 2 settlements (PDF). It included the $275 million COPPA fine- the highest ever penalty for violation of an FTC rule, and $245 million will be paid for refunding customers for the dark billing practices adopted by Epic Games.

Here, it is worth mentioning that, this is also the most significant refund amount imposed by the FTC in a gaming case. The company has agreed to pay both fines.

For your information, a Canadian law firm decided to file a class-action lawsuit (PDF) against the renowned game developer in 2019 for deliberately creating a highly ‘addictive game’ Fortnite.

However, the case got prolonged as the court took time to determine whether they could proceed. It seems that the court has now agreed that the plaintiff’s claims aren’t “manifestly ill-founded.”

In August 2019, Epic Games, which is not new to lawsuits, was also sued over hacked Fortnite accounts and for not protecting Fortnite accounts from hackers.

Epic Games Statement

In its official statement, Epic Games said it accepted the agreement because it wanted the company to encourage consumer protection.

“Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved, and long-standing industry practices are no longer enough. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”

Epic Games claims to have improved its payment flows and will offer a Yes or No option before saving payment data. The company will also allow an instant purchase cancellation feature and self-service funds.

Regarding the disputed feature, Epic recently rolled out Cabined Accounts, allowing players to register with a birth date, which will be examined according to their country’s digital consent age.

The gaming giant has also disabled chat and purchasing features too. And whenever a child signs up, their parents will be notified by email so that they can adjust their kids’ settings. This feature is available for Fall Guys, Fortnite, and Rocket League.

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