Fortnite and Fall Guys developer, Epic Games, is facing the accusation of collecting children’s personal data; and tricking users into making unwanted purchases. EPIC GAMES has agreed to pay a $520 million USD settlement over charges. The news was announced by the Federal Trade Commission (FTC) on Monday.
Fornite developer Epic Games is accused of collecting personal data from Fornite users under the age of 13; without obtaining parental approval. Internal Epic Games surveys and the licensing of Fortnite branded toys, the FTC alleges, show Epic Games clearly knew at least some of its player base was underage. In addition, Epic Games asks parents to essentially, jump through hoops in order to delete their children’s personal information. And the company allegedly failed to do so on several occasions.
Meanwhile, FTC Chair Leena Khan says that,
“Protecting the public, and especially children, from online privacy invasion and dark patterns is a top priority for the Commission, and these enforcement actions make it clear to business that the FTC is cracking down on these illegal practices”
Violating the Children’s Online Privacy Protection Act
The FTC took shots of Epic’s default privacy settings, which turn live voice and text communication on by default. This potentially leads to children being linked up with teens and strangers online. In some cases, this exposes underage users to bullying, harassment, and even suicide. Although warned by its employees since 2017, Epic still refused calls to make voice and text communication opt-in
Supporting Dark Patterns in the Game Industry
These dark patterns include tricking players into making unwanted in-game purchases. This happens through counterintuitive, inconsistent, and confusing button configuration; including being charged when walking from sleep mode.
The FTC also says that account holders can be charged without authorisation. Kids have racked up hundreds of dollars in charges without their parent’s consent. Additionally, players can mistakenly spend money when activating the game or loading a new screen. The FTC concludes that Epic “ignore more than one million user complaints” over erroneous charges while ‘intentionally’ obscuring cancellation and refund features.
The Record-Breaking Settlement
The figure comprises two separate penalties: A $275 million fine for violating children’ online privacy protections (COPPA) rule, which conducts limits on websites and online services directed to children under the age of 13.
Epic’s 275 million USD settlement is easily the largest for child privacy violation; compared to Google’s 170 million USD penalty in 2019 regarding the collection of personal information from children on YouTube.
In the second case, Epic needs to pay $245 million USD in a refund customer who being tricked into manipulative online schemes and having unwanted purchases.
What to Watch Next?
The fine creates a major regulatory win for the Biden administration’s progressive-minded FTC, who, up until now, had largely to deliver on its promise of more robust reinforcement of U.S. tech companies.
Besides, the fine is more evidence of the FTC’s growing attention to the video game industry. This includes suing Microsoft to block its acquisition of Activision Blizzard. At the same time, Epic is grappling with various lawsuits with Apple and Google over issues such as Apple taking 30 per cent from both apps and in-app purchases.
Last but not least, Fortnite recently kicked off Chapter 4, which is believed as a fresh start for a major overhaul and other updates.
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