The FTC finalizes Epic’s $245 million settlement over sketchy Fortnite purchases

The Federal Trade Commission slammed Epic Games with $245 million in fines this week, ordering the Fortnite developer to compensate consumers who made unwitting purchases in its digital store. The settlement, first announced back in December, is now finalized.

“Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button,” the FTC wrote in the announcement. The complaint also criticized Epic for allowing underage players to make frictionless, unauthorized purchases without sign off from their parents.

The $245 million settlement — a huge number but one that doesn’t top the regulator’s $5 billion fine against Facebook in 2019 — will go toward refunding customers. The FTC order will also require Epic to discontinue its use of “digital design tricks” like dark pattern design, obtain affirmative consent for digital purchases and it will block the company from locking the accounts of customers who dispute charges for digital goods and services.

The latest settlement, now finalized, follows another massive $275 million in fines that the agency proposed in December over the company’s handling of accounts for Fortnite players under the age of 13. The FTC alleged that Epic ran afoul of the Children’s Online Privacy Protection Act (COPPA) by collecting full names and contact information from children without parental consent. That settlement also cited Epic’s decision to launch Fortnite without parental controls and special protections for the young users who comprise a large swath of its player base.

“The Justice Department takes very seriously its mission to protect consumers’ data privacy rights,” Associate Attorney General Vanita Gupta previously said of the dual settlements. “This proposed order sends a message to all online providers that collecting children’s personal information without parental consent will not be tolerated.”

In early December, just prior to the FTC announcement, Epic announced that it would introduce a new account type designed to protect younger players. That feature, called “cabined accounts,” was added into Fortnite, Rocket League and Fall Guys — three popular online multiplayer titles from the game maker.

“All players globally will be asked to provide their date of birth at log in,” Epic wrote in a blog post at the time. “If someone indicates they are under 13 or their country’s age of digital consent, whichever is higher, their account will be a Cabined Account and they will be asked to provide a parent or guardian’s email address to begin the parental consent process.” Until they obtain parental consent, chat, digital purchases and some other features are disabled for cabined accounts.

Protections relying on users self-reporting their own age are an imperfect solution at best. But gaming and social media companies alike have yet to craft systems that concerns over kids’ safety (and the ensuing regulatory risks) while still allowing young users access to the online virtual spaces where they will inevitably wind up spending time.

Epic games like Fortnite are already well established among young users, but the company is apparently doubling down on the youngest subset of those players. Last year, Epic announced a partnership with LEGO to build “an immersive, creatively inspiring and engaging digital experience for kids of all ages to enjoy together” — a metaverse collaboration that could give rival Roblox a run for its money.