Fortnite creator Epic Games will pay $520m to settle allegations that it illegally collected children’s personal information and tricked people into making purchases, the company and United States Federal Trade Commission say.
It will pay a record penalty of $275m for violating a children’s privacy law and will adopt strong default privacy settings for young people, the commission said on Monday. Epic Games will also pay $245m to refund consumers duped into making purchases they did not intend to make.
“Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,” commission Chairwoman Lina Khan said in a statement.
The commission made the announcement as it takes a more muscular role in policing the gaming industry, including suing Microsoft to block its $69bn bid to acquire Activision.
Epic said in a statement on Monday that it had eliminated pay-to-win and pay-to-progress mechanics when two players compete against each other and eliminated random item loot boxes in 2019. It also said it was putting into place an explicit yes/no choice to save payment information.
It said players could seek refunds 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.
To protect children, Epic said it had created features like easier-to-access parental controls and a PIN requirement to allow parents to authorize purchases and a daily spending limit for kids under 13.
The commission said Epic employees had expressed concerns about the company’s default settings in place for children, saying people should be required to opt in for voice chats. The commission said voice and text chat must be turned off by default.
Children’s privacy advocates were pleased with the settlement. “Kids should also have their data privacy rights better respected through this enforcement of the federal kids data privacy law,” Jeff Chester of the Center for Digital Democracy said.