The US Federal Trade Commission has announced that Epic Games must pay out over $520 million from two penalties related to children's privacy laws and various other predatory practices surrounding Fortnite's in-game purchases. Epic Games has recently made a few adjustments to Fortnite's user interface as a result of complaints and has issued a statement detailing its policies and the measures it has taken.
Epic Games is most well-known for its incredibly popular free-to-play battle royale game Fortnite which has generated billions in revenue from microtransactions. As a free-to-play game that is enjoyed by a significant number of children, its monetization practices have been the subject of controversy and lawsuits in the past, resulting in major changes to its loot box system and other income sources. Many of the practices made popular by Fortnite have become ubiquitous in the gaming industry, with loot boxes, premium battle passes, and other systems being a point of contention among games like Diablo Immortal.
The FTC announced today that Epic Games has agreed to pay a record-breaking half a billion dollars in penalties over allegations of privacy violations and unwanted charges, with a $275 million penalty for the violation of children's privacy laws and a $245 million penalty for the unwanted charges. Samuel Levine, director of the FTC's Bureau of Consumer Protection, said regarding Fortnite's microtransactions and privacy violations that “Epic put children and teens at risk through its lax privacy practices, and cost consumers millions in illegal charges through its use of dark patterns,” and that "the company will be required to change its default settings, return millions to consumers, and pay a record-breaking penalty for its privacy abuses.”
Epic Games issued a statement detailing the changes it made to address issues regarding child gamers and microtransactions, such as Epic Games Launcher's kids account feature that was implemented earlier this month and the switch to a "hold to buy" mechanic for Fortnite purchases rather than a single button press. Epic also extended the window for canceling cosmetic purchases to 24 hours to alleviate accidental purchases, and a confirmation pops up when a player is about to equip a newly purchased cosmetic that would cancel its refund eligibility. By default, players under 18 now have their chats defaulted to "Nobody," profile details defaulted to hidden, and parties defaulted to "invite only."
The FTC has been looking more closely at video games in recent years, such as opening investigations into loot box systems after EA's Star Wars Battlefront 2 loot box controversy prompted worldwide regulatory scrutiny and an outright ban on loot boxes in Belgium. Hopefully, this record penalty for Epic Games will get other developers to rethink their monetization practices and privacy policies.
Source: FTC, Epic Games, Gamesradar