The creators of the popular video game Fortnite will pay a $AU773 million penalty in the U.S. over allegations it breached child privacy laws and tricked users into making unwanted payments.
The payment includes refunds to affected users. It’s the largest payment ever made over breaches of U.S. consumer law.
Here’s what you need to know.
Background
Fortnite is an interactive online game created by Epic Games and launched in 2017. It has a global following and is popular with children. It is free to play but charges for in-game items.
The Federal Trade Commission (FTC), a U.S. consumer protection agency, filed court proceedings against Epic alleging its practices for collecting user information and soliciting payments broke consumer laws.
This payment is the result of a settlement of those court proceedings.
What were the claims?
The FTC accused Epic of unlawfully collecting the personal information of children without the consent of their parents. The FTC says children were then exposed to harassment and psychologically traumatising content when the game paired them up with adult strangers.
The FTC also argued Epic tricked players, especially children, into making “hundreds of millions of dollars” of unwanted payments, again with no parental involvement, and then barred users from accessing their purchases when they disputed the charges.
The settlement
This week, Epic and the FTC (with the U.S. Department of Justice) agreed on a settlement for the two allegations.
For the privacy complaints, Epic will pay $AU409 million – the largest ever penalty for violating a law managed by the FTC.
For the unwanted payments, Epic will refund customers $AU364 million – the biggest refund yielded for a FTC gaming case.
Epic’s response
In a statement, Epic said they accepted the settlement because they wanted to be at the “forefront of consumer protection and provide the best experience for our players”.
“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.”
What’s next?
The settlement must be approved by the U.S. Federal Court before it can be completed.
The FTC has said it will organise a refund program to compensate players who had been unfairly charged by Epic Games.
Stronger privacy settings for children will also be adopted by Epic as part of the settlement, which will mean that voice and text communication for Fortnite’s online gaming will be turned off by default.
