Epic Games reaches out with its statement on the matter of FTC’s fines.
In December 2022, Epic Games settled with FTC (Federal Trade Commission) to pay two separate fines. A $275 million civil penalty for alleged violations of the COPPA (Children’s Online Privacy Protection Act). And another $245 million as refunds to consumers harmed by Epic’s allegedly deceptive user interface choices, which sum up to $520 million.
According to FTC, the $275 million is the largest amount the agency has ever imposed for a rule it enforces. The refund amounting to $245 million, on the other hand, is the largest administrative order in FTC history.
FTC grounded its allegations on evidence from Epic’s own employees in addition to various user statistics, products’ privacy statements, and default user-interface design choices, options, and features. According to FTC, Epic Games launched Fortnite with no parental controls. They attempted to disavow any responsibility by adding a paragraph at the end of the Privacy Policy asserting that it was not oriented for kids.
Epic collected personal information from the players, including addresses, full names, email addresses, and user names, without age verification or parental consent. Further, the game’s cartoonish appearance and its merchandise targeting kids have been considered proof that Epic Games was intentionally targeting a child audience and therefore was responsible for taking necessary action.
Pouring fuel on the fire, FTC decided that digital dark patterns were used in the game’s user interface so that the players make unintentional in-game purchases. Charging players for in-game merchandise without their express and informed consent was considered a severe violation.
In an article on FTC’s official website titled “Fortnite Video Game Maker Epic Games to Pay More Than Half a Billion Dollars over FTC Allegations of Privacy Violations and Unwanted Charges” the agency clearly stated that it didn’t take these violations lightly and opted to make an example of the case. The agency also shared the agreement document and the details of how Fortnite refunds would be handled on its website.
Following the incident, Epic Games published an article in the blog on its official website with the title “Epic FTC Settlement and moving beyond long-standing industry practices”. In the article, Epic Games states:
“No developer creates a game with the intention of ending up here. The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount. 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. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”
Setting aside the details or manner in which the actions that have been the subject of allegations, this statement at least looked regretful if not sincere. Epic Games apparently came to terms with the FTC’s fines imposed on the company. According to Game Informer, the company reached out to them with its previous public statement on the matter.Time will tell if Epic Games has learned the lesson or will keep its promise to be “at the forefront of consumer protection”. Still, FTC’s record fines will likely make other companies take these regulations more seriously.
