Fortnite makers slapped with a record $520mn penalty by the FTC

Epic Games, makers of the hit video game Fortnite, will pay a total of $520 million to settle allegations by the US government that it misled millions of players, including children and teens, into making unintended purchases. It also illegally collected children's personal information, thus violating a landmark federal children’s privacy law, the Federal Trade Commission and the company said on Monday.

A record $275 million will go against violating the privacy law. The company will also adopt strong default privacy settings for young people. Epic Games will also pay $245 million to refund consumers duped into making purchases by so-called "dark patterns", the FTC said.

"Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children," said FTC Chair Lina Khan in a statement.

Reponding to the settlement, Epic said that pay-to-win and pay-to-progress mechanics that come into play when two players compete against each, had been eliminated. Random item loot boxes were already eliminated in 2019. For saving payment options, players will have an explicit yes/no option to choose from.

Players looking to seek refunds can do so via credit cards. "If a cardholder sees an unauthorized transaction on their statement, they may report it to their bank to have it reversed," the company said in its statement.

In order to protect children and ensure they do not spend money without the knowledge of their parents, the company said it had created features like easier-to-access parental controls and a PIN requirement, whereby parents will authorize purchases. It has also put in place a daily spending limit for kids under 13.

Talking about safeguarding children and their privacy, the FTC quoted Epic employees as saying that the company's default settings for children is worrying and instead people should be required to opt in for voice chat. The FTC stressed that voice and text chat must be turned off by default.

(With inputs from agencies)

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