Fortnite Maker Epic Games Fined $520M For Privacy Violations

  • General
  • December 19, 2022
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  • 4 minutes read

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Epic Games, the company behind the popular Fortnite video game, will pay a considerable sum to resolve lawsuits filed by the U.S. Federal Trade Commission (FTC) alleging privacy violations and “dark patterns” that tricked players into making unintentional purchases. Epic has agreed to pay $520mn in penalties, which represents the highest fine levied on a video gaming company for user-hostile behavior.

  • Epic will pay $275mn to the government’s coffers and $245mn to refund customers who fell victim to its alleged “dark patterns”, which refer to design tricks that apps employ to make users do things they didn’t intend to.

The FTC accused Epic Games in a lawsuit of violating the federal Children’s Online Privacy Protection Act (COPPA) by collecting data on Fortnite players under 13 years of age without notifying or obtaining consent from their parents. The agency also accused the game developer of illegally enabling real-time voice and text chat communications for children and teens by default; some players were “bullied, threatened, harassed, and exposed to dangerous and psychologically traumatizing issues such as suicide while on Fortnite,” it claimed.

In another lawsuit, the FTC accused Epic Games of implementing a confusing button configuration on Fortnite that made players incur unwanted charges by pressing a single button. It cited cases where Fortnite players were charged by pressing an adjacent button when attempting to preview an item or while the game was on a loading screen. The agency also accused Epic Games of charging child players without parental authorization, locking the accounts of customers that disputed unauthorized charges, and obscuring cancel and refund features on its interface.

  • Epic Games earns revenue from Fortnite by selling virtual items and an in-game currency called V-Bucks. According to court documents filed during Epic’s lawsuit against tech giant Apple, it brought in over $9bn in revenue in 2018 and 2019, most of it from Fortnite. A testimony from Epic’s CEO during the court proceedings also confirmed the company made over $5bn in 2020. Revenue figures for 2021 weren’t publicly disclosed.

 

  • Epic has raised over $6bn from VCs. In April 2022, it nabbed separate $1bn investments from gaming giant Sony and the owners of the Lego toy brand; the funding round valued Epic at $32bn post-money.

As part of its settlements, Epic must make changes to protect Fortnite players and establish a privacy program addressing the problems the FTC identified in its complaints. The agency has set up a website for Fortnite players who believe they were unfairly charged to request refunds; the claims may take several months or longer to process, it said.

 

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