FTC Authors Epic $500 million Settlement with Fortnite Game Company

Why This Privacy Law is Important:

The Federal Trade Commission has continued its campaign of stepped-up privacy enforcement with a $520 million settlement with Epic Games, the maker of popular online game Fortnite, over violations of children’s privacy and its use of dark patterns to charge consumers extra fees.

Overview:

On December 19, 2022, the FTC announced in a press release that it had reached an agreement with Epic Games on a $520 million settlement for alleged privacy violations. While Fortnite is free to download and play, users often pay for in-game items including costumes (known as “skins”) and dance moves (“emotes”). Over 400 million people worldwide play the game, in which they battle each other alone and in teams to determine who is the final survivor out of 100 players. During gameplay, users can speak to each other using text or voice communications.
The FTC agreement, which broke down into 275 million in fines for its alleged violations of the Children’s Online Privacy Protection Act (COPPA) and $245 million in consumer refunds for charges made as a result of its use of dark patterns to trick game players into unwanted purchases. It set several records: the largest ever penalty for violating an FTC rule (COPPA); the largest refund in a gaming case; and the largest total administrative order in its history. In addition to the monetary component of the settlement, Epic agreed to adopt strong privacy settings for children and teens, namely that in-game voice and text communications are turned off by default.