Toni Dimaano Tech 12.19.2022 22:Dec PM EST

FTC Fines Epic Games $520 Million Over Privacy Violations, Unwanted Charges

The popular video game creator Epic Games has agreed to pay the Federal Trade Commission a total of $520 million to resolve claims of Children's Online Privacy Protection Act (COPPA) violation.

According to CNN Business, it violated an important federal law protecting the privacy of children by tricking millions of players, including kids and teenagers, into making unintended purchases.

FTC Zeroes In On Two Separate Cases Against Epic Games

According to a proposed federal court order, Epic will pay $275 million for allegedly breaking the COPPA rule, which is the largest penalty ever obtained for violating an FTC rule.

Additionally, the Fortnite maker will return $245 million to customers for its billing practices and the use of "dark patterns," the largest refund in any game-related case.

In a first-of-its-kind provision, Epic will be required to implement strong privacy default settings for kids and teenagers, ensuring that voice and text communications are disabled by default.

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

According to the FTC's complaint, parents had to "jump through extraordinary hoops" to get Epic to delete personal information about their children.

However, even then the complaint claims that the company did not honor the requests of the FTC and the parents, Engadget reports.

Epic Games And FTC Are Looking For Privacy Solutions

In a press release, the FTC writes that the protection of the public, and especially of children, from invasions of privacy and dark patterns should be prioritized.

Because of this, the Commission is enforcing action to warn businesses that it is cracking down on such unlawful practices.

This proposed order informs all online service providers that it is not acceptable to collect children's personal information without their parents' consent, according to the Department of Justice.

Since Epic Games had no way of ensuring that children and adults would not be matched up in online play, the FTC alleges that these features exposed children to harassment and abuse.

Tech Crunch reports that while playing the game, children were exposed to bullying, threats, harassment, and "psychologically traumatizing issues such as suicide."

With this, Epic Games says that it has accepted the agreement because the company wants to be a leader in consumer protection to give its users the best experience.

It can be remembered that the videogame developer introduced "cabined accounts" earlier this month for young Fortnite, Fall Guy, and Rocket League players.

It claimed that using these accounts gave children a secure way to play its games by preventing them from using voice chat or making in-game purchases using real money without parental permission.

Epic Games claims that it upholds the same principles of fairness, transparency and privacy that the FTC enforces, and says that the unlawful practices the FTC references are not how Fortnite operates.

Because of this, CNN Business says that the company will continue to be straightforward about what customers can anticipate when making purchases, making sure cancellations and refunds are easy.

Additionally, the videogame developer pledges to build a safe environment to help keep it save and fun for players of all ages.