Epic Games fined a record $520 million; developer failed to protect children and duped customers

Epic Games, developer of the popular Fortnite online video game, has been involved in a high-profile legal battle with Apple after the latter removed Epic and Fortnite from the App Store. The developer offered Fortnite players the opportunity to buy in-app items through its own app storefront at a lower price since these transactions would bypass Apple’s own in-app payment processing platform for which the tech giant takes a 15% to 30% cut.

The FTC accused Epic Games of using dark patterns to trick users into making in-app purchases

Epic must now disable text and voice communications on its games by default

The FTC notes that Epic’s fine is actually made up of two record-breaking settlements. One is a $275 million fine for violating COPPA. This is the largest fine ever announced by the FTC for the violation of one of its rules. Epic also will be required to include strong default settings to protect the privacy of children and teens. Voice and text communications must be disabled by default. This payment goes to the Treasury Department.

As part of the FTC’s order, Epic will also pay a fine of $245 million which will be used to refund customers of all ages for the developer’s billing practices and use of dark patterns. This is the largest amount of money ordered by the FTC to be refunded in an action related to gaming. It also is the largest administrative order in the history of the agency.

FTC Chair Lina M. Khan said, “As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children. Protecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the Commission, and these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices.”