
FTC Charges Epic Games with a $ 520 Million Settlement

Epic Games is charged with a $ 520 million settlement by the Federal Trade Commission (FTC) over charges related to children’s privacy.
According to the FTC, Epic Games, the developer of well-known all-ages video games like ‘Fortnite’ and ‘Fall Guys’, allegedly violated the Children's Online Privacy Protection Act (COPPA) by using design tricks, known as dark patterns, to trick millions of players into making unintentional purchases.
Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough,” Epic wrote.
“We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”
Epic said that it has updated its payment flows to offer a yes or no option to save payment info, as well as instant purchase cancellations and self-service refunds.
In Epic’s response to the FTC fine, the company pointed to a new feature it rolled out earlier this month called Cabined Accounts
According to the FTC’s, children have been exposed to bullying, threats, harassment and “psychologically traumatizing issues such as suicide” while playing the game.
In the last two years, Epic has raised more than $3 billion in venture capital, most recently at a $31.5 billion valuation. Along with Lego, whose parent company invested $1 billion, Epic is working on building a kid-friendly metaverse.
Epic has also been embroiled in a lawsuit with Apple, accusing the tech giant of anti-competitive behavior. The video game company challenged Apple’s policy that it can remove products from the iOS App Store if the app reroutes customers around paying within the app, which gives Apple a 30 percent cut.
In Epic’s response to the FTC fine, the company pointed to a new feature it rolled out earlier this month called Cabined Accounts. If a player registers with a birth date that places them below their country’s age of digital consent (13 in the US), then features like chat and purchasing are disabled. When a child signs up, their parent will be notified via email and can then adjust their child’s settings if they choose. Right now, this feature is available for ‘Fortnite’, ‘Fall Guys’ and ‘Rocket League’.