Fortnite maker Epic Games will pay $520 million (approximately Rs. 4,305 crore) to settle allegations that it illegally collected personal information from children and tricked people into making purchases, the Federal Trade Commission and company said Monday.
It will pay a record fine of $275 million (approximately Rs. 2,300 crore) for violating the privacy law for children and adopt strict default privacy settings for young people. Epic Games will also pay $245 million (approximately Rs. 2,000 crore) to reimburse consumers tricked by so-called “dark patterns” into making purchases they had no intention of making, the FTC said.
“Epic used privacy-invasive default settings and deceptive interfaces that fooled Fortnite users, including teens and children,” FTC Chair Lina Khan said in a statement.
The announcement comes as the agency has taken a more muscular role in overseeing the gaming industry, last week announcing a complaint against Microsoft over its $69 billion (approximately Rs. 6 lakh crore) bid to acquire Activision.
Epic said in a statement Monday that it had eliminated pay-to-win and pay-to-progress mechanisms when two players compete against each other and that it had eliminated random item loot boxes in 2019. place an explicit yes/no choice to save payment information.
It said players could request refunds via credit cards. “If a cardholder sees an unauthorized transaction on their statement, they can report it to their bank to reverse it,” the company said in its statement.
To protect children, Epic said it created features such as more easily accessible parental controls and a PIN requirement that allows parents to authorize purchases and a daily spending limit for children under 13.
The FTC said Epic employees had raised concerns about the company’s default settings for children, saying people should be required to sign up for voice chat. The FTC said voice and text chat should be turned off by default.
Children’s privacy advocates welcomed the settlement, with Jeff Chester of the Center for Digital Democracy saying that “children, too, should better respect their data privacy rights through this enforcement of the federal Children’s Data Privacy Act ( COPA).”
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