FTC Charged Epic Games $520 Million For Child Privacy Violation

December 20, 2022 By Monica Green

(Image Credit Google)

The Federal Trade Commission (FTC) announced Monday morning that it will charge Epic Games a $520 million settlement over allegations of child privacy violations. Epic Games, which makes popular all-ages games like "Fortnite" and "Fall Guys," allegedly violated the Children's Online Privacy Protection Act (COPPA) by deploying "design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases," the FTC said in a press release. The $520 million payment is split into two parts: The COPPA fine is $275 million, the highest-ever penalty for violating an FTC rule. The FTC also fined Epic $245 million to compensate customers for "dark patterns and billing practices." Epic says it will pay both fines, with the latter representing the FTC's largest-ever refund in a gaming case. “Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough,” Epic wrote in a statement. “We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.” Epic has updated its payment flows to include a yes/no option for saving payment information, as well as instant purchase cancellations and self-service refunds. [caption id="attachment_73711" align="aligncenter" width="1200"]

Epic Games[/caption] The FTC took issue with Epic's live text and voice communication features, which were set to be enabled by default, in addition to making it too easy for children to make online purchases. The FTC claims that these features exposed children to harassment and abuse, particularly because Epic had no way of ensuring that children and adults were not matched together in online play. According to the FTC's press release, children have been exposed to bullying, threats, harassment and "psychologically traumatizing issues such as suicide" while playing the game. In Epic's response to the FTC fine, the company pointed to a new feature it rolled out earlier this month called Cabined Accounts. If a player registers with a birth date that falls below their country's digital consent age (13 in the United States), features such as chat and purchasing are disabled. When a child signs up, their parent will be notified via email and can then adjust their child's settings if they choose. This feature is currently available in "Fortnite," "Fall Guys," and "Rocket League." [caption id="attachment_63229" align="aligncenter" width="1200"]

Image credit: epicgames[/caption] Epic has raised more than $3 billion in venture capital in the last two years, most recently at a $31.5 billion valuation. Epic is working on a kid-friendly metaverse with Lego, whose parent company has invested $1 billion.

By Monica Green

I am specialised in latest tech and tech discoveries.

FTC Charged Epic Games $520 Million For Child Privacy Violation

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