Epic Games to Pay $520 Million in FTC Settlement Following COPPA Violation Allegations

Epic Games

The FTC has ordered Fortnite developer Epic Games to pay $520 million in relief over allegations that the company has violated the Children’s Online Privacy Protection Act (COPPA) and used "design tricks" or dark patterns that made millions of players make unwanted purchases.

As part of a proposed federal court order filed by the Department of Justice, on behalf of the FTC, Epic is ordered to pay $275 million for violating the COPPA Rule. Under a separate order, the company is ordered to pay $245 million to refund players over the dark patterns.

Both orders are the largest penalty ever obtained for violating an FTC rule, and the FTC's largest refund amount in a gaming case.

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

"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.”

“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,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Under the proposed orders announced today, the company will be required to change its default settings, return millions to consumers, and pay a record-breaking penalty for its privacy abuses.”

In response to the FTC order, Epic Games said, "The old status quo for in-game commerce and privacy has changed, and many developer practices should be reconsidered. We share the underlying principles of fairness, transparency and privacy that the FTC enforces, and the practices referenced in the FTC’s complaints are not how Fortnite operates. "

"We will continue to be upfront about what players can expect when making purchases, ensure cancellations and refunds are simple, and build safeguards that help keep our ecosystem safe and fun for audiences of all ages."