The total includes two separate settlements at $275M and $245M.
Black and white logo for Epic Games

Fortnite developer and operator of the Epic Games Store, Epic Games, just agreed to pay record-breaking settlements amounting to $520 million (USD). The Federal Trade Commission (FTC) won two settlements against Epic Games, one for $275 million (USD) and another for $245 million.

Epic Games will pay $275 million to the FTC for violating the Children’s Online Privacy Protection Act (COPPA). The FTC says that Epic Games "deployed design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases." On top of this monetary payment, Epic is now also "required to adopt strong privacy default settings for children and teens, ensuring that voice and text communications are turned off by default."

The FTC argued successfully in federal court that Epic Games violated COPPA by failing to notify parents or obtain parental consent.

The FTC alleged that Epic was aware that many children were playing Fortnite—as shown through surveys of Fortnite users, the licensing and marketing of Fortnite toys and merchandise, player support and other company communications—and collected personal data from children without first obtaining parents’ verifiable consent. The company also required parents who requested that their children’s personal information be deleted to jump through unreasonable hoops, and sometimes failed to honor such requests.
In addition, the FTC says that the default "on" setting for voice and chat communications caused harm to children and teens.

Epic’s settings enable live on-by-default text and voice communications for users. The FTC alleges that these default settings, along with Epic’s role in matching children and teens with strangers to play Fortnite together, harmed children and teens. Children and teens have been bullied, threatened, harassed, and exposed to dangerous and psychologically traumatizing issues such as suicide while on Fortnite.
The $275 million from Epic Games will go to the U.S. Treasury for violation of the COPPA Rule. Epic Games must also disable voice and text communications for children and teens unless given parental consent. Those under 13 will need parental consent while 13 and above can either provide parental consent or other affirmative consent. Epic must also deelte personal information that they previously collected from Fortnite users in violation of the COPPA Rule's parental notice and consent requirements, unless the company is able to obtain parental consent to keep that data, or if the user identifies as 13 or older through an age gate.

These settlements seem to coincide with Epic's newly announced Cabined Accounts feature that they rolled out near the start of the month. These Cabined Accounts will restrict younger players from accessing a number of features within games like Fortnite until given parental consent.

Epic Games must also "establish a comprehensive privacy program that addresses the problems identified in the FTC’s complaint, and obtain regular, independent audits."

The remaining $245 million that Epic has to pay will come in the form of refunds to customers "for its dark patterns and billing practices." According to the FTC, this is the "largest refund amount in a gaming case, and its largest administrative order in history."

Illegal Dark Patterns
In a separate administrative complaint, the FTC alleged that Epic used dark patterns to trick players into making unwanted purchases and let children rack up unauthorized charges without any parental involvement. The complaint alleged that Epic:
  • Used dark patterns to trick users into making purchases: The company has deployed a variety of dark patterns aimed at getting consumers of all ages to make unintended in-game purchases. Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button. For example, players could be charged while attempting to wake the game from sleep mode, while the game was in a loading screen, or by pressing an adjacent button while attempting simply to preview an item. These tactics led to hundreds of millions of dollars in unauthorized charges for consumers.
  • Charged account holders without authorization: Children and other users who play Fortnite can purchase in-game content such as cosmetics and battle passes using Fortnite’s V-Bucks. Up until 2018, Epic allowed children to purchase V-Bucks by simply pressing buttons without requiring any parental or card holder action or consent. Some parents complained that their children had racked up hundreds of dollars in charges before they realized Epic had charged their credit card without their consent. The FTC has brought similar claims against companies such as Amazon, Apple, and Google for billing consumers millions of dollars for in-app purchases made by children while playing mobile app games without obtaining their parents’ consent.
  • Blocked access to purchased content: The FTC alleged that Epic locked the accounts of customers who disputed unauthorized charges with their credit card companies. Consumers whose accounts have been locked lose access to all the content they have purchased, which can total thousands of dollars. Even when Epic agreed to unlock an account, consumers were warned that they could be banned for life if they disputed any future charges.
Epic ignored more than one million user complaints and repeated employee concerns that “huge” numbers of users were being wrongfully charged. In fact, Epic’s changes only made the problem worse, the FTC alleged. Using internal testing, Epic purposefully obscured cancel and refund features to make them more difficult to find.​