Epic Games Agrees to Pay FTC $520M to Settle Fortnite-Related COPPA Violations

Key insights

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Key agreement

Epic Games reached a $520 million settlement with the FTC.

The settlement resolves civil complaints regarding Fortnite's Children’s Online Privacy Protection Act (COPPA) violations and deceptive user interface practices.

Total settlement. Epic Games agreed to a $520 million settlement with the Federal Trade Commission (FTC).

Billing practices

Epic Games was accused of obscuring refund and cancellation features.

The FTC claimed this made it difficult for users to recover money from unauthorized or unwanted purchases.

Like a hidden button on a vending machine, the refund option was hard to find.

Billing allegations. The agency claimed that Epic Games intentionally obscured cancel and refund features to make it difficult for users to recover money from unauthorized or unwanted purchases.

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Summary

Epic Games reached a $520 million settlement with the Federal Trade Commission in December 2022 to resolve two civil complaints regarding its flagship title, Fortnite. The settlement addresses allegations that the company violated the Children’s Online Privacy Protection Act (COPPA) and employed deceptive user interface practices to encourage unauthorized purchases. While the company agreed to the payment, it admitted no wrongdoing, characterizing the settlement as a strategic move to resolve the legal disputes.

The financial penalty is divided into two primary components: $275 million is allocated to address COPPA violations, while $245 million is designated for consumer refunds. The FTC alleged that the company collected personal information from players under the age of 13 without parental consent and enabled real-time audio and text communication by default, which potentially exposed minors to harassment from older users. Furthermore, the agency claimed that the company intentionally obscured refund and cancellation features to complicate the process for consumers seeking to recoup funds.

This agreement represents the largest civil settlement in the history of the Federal Trade Commission. The action underscores the agency's heightened focus on digital privacy and consumer protection within the gaming industry, particularly concerning the safety and financial exploitation of younger demographics. By finalizing this settlement, the company concludes a significant regulatory challenge while avoiding a prolonged court battle.