Epic Games, the creator of Fortnite, will pay $520 million to end privacy lawsuits

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U.S. studio Epic Games, creator of Fortnite, will pay $520 million to end allegations that it illegally collected personal information on children and enticed people to make purchases, according to the U.S. Federal Trade Commission.

The company will pay a record $275 million fine for violating a children’s privacy law and adopt strict default privacy settings for young people, the commission said Monday. Epic Games will also pay $245 million to reimburse consumers who were duped into making purchases they did not intend to make.

« Epic used privacy-invasive default settings and deceptive interfaces that misled Fortnite users, including teens and children, » commission chairwoman Lina Khan said in a statement.

Indeed, the commission is playing a muscular role in policing the gaming industry, including suing Microsoft in an attempt to block its $69 billion bid to acquire Activision.

Epic said in a statement Monday that the company has removed pay-to-win and pay-to-progress mechanics when two players compete. It also said it was implementing an explicit yes/no choice to save payment information.

It added that players can request refunds via credit card. « If a cardholder sees an unauthorized transaction on their statement, they can report it to their bank to have it reversed. »

To protect children, the company said it has implemented features such as easier-to-access parental controls, a PIN requirement for parents to authorize purchases and a daily spending limit for children under 13.

Epic launched Fortnite in 2017, and the game quickly gained popularity. After a major investment from Sony last April, privately held Epic was valued at around $32 billion. Its founder and CEO Tim Sweeney is ranked as the richest person in North Carolina.

In a statement following the FTC’s announcement, Epic Games spokeswoman Candela Montero noted that the company « agreed to this settlement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players. »

Children’s privacy advocates welcomed the agreement. « Children should also have their data privacy rights better respected through the enforcement of the federal Children’s Data Privacy Act, » said Jeff Chester of the Center for Digital Democracy.

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