Fortnite Developer Epic Games Fined in Record-Breaking $520 Million Settlement Over Children's Privacy, 'Dark Practices' The federal agency plans to set up a website for consumer refunds for certain unauthorized purchases on the platform in the Epic Games Store and in Fortnite.

By Gabrielle Bienasz

Opinions expressed by Entrepreneur contributors are their own.

Chesnot / Contributor I Getty Images
Gamer playing Fortnite in 2018 in Paris.

In two separate settlements, the Federal Trade Commission will fine Epic Games, the developer behind the extremely popular battle royale game Fortnite, a total of $520 million related to issues over children's privacy and what the agency characterized as "misleading credit card charging practices."

The record-breaking settlements were announced Monday.

"No developer creates a game with the intention of ending up here," Epic wrote in a blog post about the two settlements.

Since at least 2017, the FTC contends, Epic Games was violating a children's privacy law used a bevy of digital practices that make it easier for customers, or unwitting kids, to accidentally purchase things in its Epic Games Store or on Fortnite, and difficult to cancel or mitigate the issue, despite complaints.

Founded in 1998, Epic Games is a Cary, North Carolina-based games developer that introduced Fortnite to the world in 2017. The game was a breakout success, pulling in 200 million players in only a couple of months, per Insider. Epic has also developed games like Gears of War.

"These enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices," said FTC Chair Lina Khan in the agency's statement.

The FTC is the enforcer behind laws that are intended to protect customers. The agency contends that Epic Games made it easy for kids (and people, in general) to buy things on Fortnite or the company's store without parental consent. It called these tactics "dark patterns," which is also a general term for software that is deceptive to users.

"Fortnite's counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button," the agency wrote, adding that the company tested and then added features to make it harder to undo a purchase or get a refund.

"Epic ignored more than one million user complaints and repeated employee concerns that "huge" numbers of users were being wrongfully charged," the FTC claimed. Finally, the agency said, if customers disputed charges, their accounts would be banned.

Epic Games said its new policy would now only disable accounts in the case of fraud. The company said it would now ask for consent to save payment information and had added extra controls to confirm a player's purchase after the fact, among other mitigating efforts it said in its blog post.

The FTC's order will require the company to pay $245 million over this issue to go to certain customers affected by the issue it outlined. At this link, you can sign up to be notified if the website is up, and see if you would qualify.

The payment complaint was filed in administrative court. The second one was It was referred to the Department of Justice and then filed in the District Court for the Eastern District of North Carolina

The order fined the company for violating the Children's Online Privacy Protection Act, which was passed in 1998. The law requires parental consent to collect the personal information of children under the age of 13, which the FTC says Epic was not doing with Fortnite.

The FTC also said the default setting for minors that allowed them to chat in real-time with text and voice while on Fortnite led younger users to be exposed to "dangerous and psychologically traumatizing issues."

The penalty for that is $275 million and will be sent to the U.S. Treasury. Epic is also being asked to delete collected personal information of people under 13 and be audited independently and regularly over this issue. The company discussed its new special accounts for minors in its blog post, called Cabined Accounts.

"We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players," the company said in the blog post of the two settlements.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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