(Reuters) — “Fortnite” creator Epic Games will pay $520 million to settle allegations that it illegally collected children’s personal information and tricked people into making purchases, the Federal Trade Commission and the company said on Monday.
It will pay a record $275 million penalty for violating children’s privacy laws and adopt strong youth privacy standards. Epic Games will also pay $245 million to reimburse consumers who were tricked by so-called “dark patterns” into making purchases they didn’t intend to make, the FTC said.
“Epic used privacy-infringing default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,”; FTC Chairwoman Lina Khan said in a statement.
The announcement comes as the agency has taken a more muscular role in policing the gaming industry, last week announcing a complaint against Microsoft over its $69 billion bid to acquire Activision.
To protect children, Epic said it had created features such as easier access to parental controls and a PIN requirement to allow parents to approve purchases and a daily spending limit for children under 13.
The FTC said Epic employees had expressed concerns about the company’s default settings for children, and said people should be required to choose voice chat. The FTC said voice and text chat must be turned off by default.
Epic said in a statement on Monday that it had eliminated the pay-to-win and pay-to-advance mechanics when two players compete against each other and that it had eliminated random item loot boxes in 2019. It also said it was betting on place an explicit yes/no choice to save payment information.
Children’s privacy advocates were pleased with the settlement, with Jeff Chester of the Center for Digital Democracy saying “children should also have their data privacy rights better respected through this enforcement of the federal Children’s Privacy Act (COPPA).”