U.S. slaps record penalty on Fortnite maker for alleged children's privacy violation

"Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children," said FTC Chair Lina Khan in a statement

Published - December 20, 2022 11:43 am IST

File photo of the Federal Trade Commission building

File photo of the Federal Trade Commission building | Photo Credit: AP

"Fortnite" creator Epic Games will pay $520 million to settle allegations that it illegally collected children's personal information and tricked people into making purchases, the Federal Trade Commission and the company said on Monday.

(For insights on emerging themes at the intersection of technology, business and policy, subscribe to our tech newsletter Today’s Cache.)

It will pay a record penalty of $275 million for violating a children's privacy law and adopt strong default privacy settings for young people. Epic Games will also pay $245 million to refund consumers duped by so-called "dark patterns" into making purchases they did not intend to make, the FTC said.

"Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children," said FTC Chair Lina Khan in a statement.

The announcement comes as the agency has taken a more muscular role in policing the gaming industry, announcing last week a complaint against Microsoft over its $69 billion bid to acquire Activision.

Epic said in a statement on Monday that it had eliminated pay-to-win and pay-to-progress mechanics when two players compete against each other and that it had eliminated random item loot boxes in 2019. It also said that it was putting into place an explicit yes/no choice to save payment information.

It said that players could seek refunds via credit cards. "If a cardholder sees an unauthorized transaction on their statement, they may report it to their bank to have it reversed," the company said in its statement.

To protect children, Epic said it had created features like easier-to-access parental controls and a PIN requirement to allow parents to authorize purchases and a daily spending limit for kids under 13.

The FTC said that Epic employees had expressed concern about the company's default settings in place for children, saying that people should be required to opt in for voice chat. The FTC said that voice and text chat must be turned off by default.

Children's privacy advocates were pleased with the settlement, with Jeff Chester of the Center for Digital Democracy saying that "kids should also have their data privacy rights better respected through this enforcement of the federal kids data privacy law (COPPA)."

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.