Fortnite Privacy Settlement

In 2017, Fortnite took the internet by storm, providing millions of players all over the world with a new, fun, and free way to play online. However, in recent years this supposedly free-to-play gaming platform has caused millions of users to pay not only with their wallets but also with their security.

According to regulators, Epic Games has agreed to pay $520 million in order to settle with the Federal Trade Commission, which alleges that the company misled thousands of players of the popular video game Fortnite into making purchases without obtaining parental consent. As mentioned in an FTC complaint filed in a North Carolina federal court, the gaming company Epic used design tricks known as "dark patterns" in order to manipulate millions of players to unknowingly make in-game purchases for items such as avatar costumes or dance moves.

The regulator said that the company was also responsible for breaching the Children's Online Privacy Protection Act, or COPPA, by collecting personal data from children under the age of 13 without informing their parents or obtaining their consent. According to court papers, by default, the company also encouraged real-time voice and text chat communication platforms for children and teens. While the company has noted that its system offers mechanisms to turn off the online chat features, those settings were buried within the game's system and were difficult for younger players to find. This has left the game’s younger users open to bullying or harassment from other online players. This includes scenarios where children were exposed to adults who threatened their safety. According to the FTC, this is considered a violation of its rule of barring unfair business practices.

On Monday, the FTC proposed that the case include a $275 million penalty for violating COPPA, which is said to be the highest penalty set for violating the FTC rule to date. The gaming company is also set to pay a fine of $245 million that will go towards refunding consumers for unauthorized charges, which was also noted as the largest refund amount issued to date for a gaming case. Along with the high fees, the settlement also requires that Epic ensures that voice and text communication for teens and children under the age of 13 are turned off by default.

As previously mentioned, the original default settings had the chat open for those gamers to use, making it dangerous for the younger players to be exposed to bullying and harassment. "Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children," said FTC Chair Lina M. Khan in a statement. "Protecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the Commission, and these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices."

It would seem as though the gaming company has a track record of violating privacy rights. Over the last two years, Epic has been in the middle of a high-profile legal battle with Apple due to its attempt to dismantle the protective barriers that help secure the iPhone App Store. In August 2022, after Epic introduced a new payment system within its Fortnite app, Apple completely removed the game from its app store, which triggered the lawsuit that went to trial in 2021.

A federal judge mostly ruled in Apple's favor because Apple claimed that its exclusive control over the app store helped protect its users' data. The ruling, however, is currently under appeal, with the expectation of a decision to be made sometime next year.

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