Epic Games fined half a billion dollars in privacy-based fiasco

The Federal Trade Commission (FTC) announced on Wednesday that it will fine Fortnite developer Epic Games a total of $520 million for violations of the Children's Online Privacy Protection Act.

The U.S. Department of Justice has filed a federal court order requiring Epic Games to pay $275 million for violating the Children's Online Privacy Protection Act and an additional $245 million in refunds to customers. The FTC Chair, Lina M. Khan had this to say in the official press release, put out by the Commission:

“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.”

This move follows the FTC’s investigation into the Activision acquisition. Indicating a potential change in direction and strategy regarding the video game industry, which has mostly avoided government scrutiny, the FTC made waves in the industry recently when it announced that it was filing a lawsuit against Microsoft over its planned acquisition of Activision Blizzard.

It could be argued that these moves are well over joy with videogames offering corporations mainline access to children’s bedrooms, which has caused a series of problematic issues ranging from ridiculous in-app purchase prices for virtual currencies, loot boxes and their associated gambling risks, and a plethora of other privacy and security related issues.

It is heartening then to see that as a part of its settlement with the FTC, Epic Games has agreed to update Fortnite to require that voice and text communications are turned off by default for children and teenagers who play the game. The move is aimed at safeguarding the privacy and security of young people who use online services and serves as a warning to other companies that may be considering similar practices.

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