Epic Games, creator of Fortnite, will pay $520 million for child privacy

The Federal Trade Commission on Monday announced a $520 million settlement with Epic Games, the developer of popular video games like Fortnite and Fall Guys, over charges that the company unlawfully collected information from children and, separately, would have prompted millions of gamers to make unintentional purchases.

The settlement involves record penalty amounts in two separate cases.

Epic has agreed to pay $275 million to settle charges from regulators that it violated a federal law, the Children’s Online Privacy Protection Act, by collecting personal information from children under 13 who played Fortnite without obtain verifiable consent from a parent. The company has also forced parents to “skip steps” to have their children’s data deleted and has sometimes failed to honor parental requests for deletion, the agency said in a lawsuit filed Monday.

The amount eclipses the $170 million fine – the previous record for violations of children’s privacy – that Google agreed to pay in 2019 following accusations that it illegally harvested data from children on YouTube and would have used them to target them with advertisements.

As part of the proposed settlement, the agency will require Epic to adopt high privacy default settings for children and teens. This means the company must disable the settings that had enabled live text and voice chats for young users.

Epic also agreed to pay $245 million to reimburse consumers accused of using manipulative online practices, known as “dark patterns,” to trick users of all ages into making unwitting purchases. Among other things, Fortnite’s user interface had a “counter-intuitive, inconsistent and confusing” layout that led to users incurring charges for pressing a single button, regulators said in a separate complaint.

Players could be charged for trying to activate the game from sleep mode or while the game was loading a screen, according to the complaint. The children ended up hoarding unauthorized charges without the knowledge of their parents. These dark pattern techniques resulted in hundreds of millions of unwanted charges for users.

This is a developing story. Check back for updates.