'Fortnite' Makers To Pay $520M To Settle Claims It Tricked Gamers Into Making Purchases

Epic Games, the maker of the popular video game "Fortnite," has agreed to pay a record $520 million to settle allegations that it violated children's privacy, exposed children and teenagers to potential harm online and tricked players into making unwanted in-game purchases.

North Carolina-based Epic Games will pay $275 million to the U.S. government to settle allegations it violated the Children's Online Privacy Protection Act (COPPA).

The Federal Trade Commission (FTC) alleged that the "Fortnite" maker knowingly collected children's personal data without notifying their parents or obtaining consent and maintained illegal default privacy settings on its games, allowing minors to directly communicate with adult strangers.

In a second and separate settlement, Epic Games will pay $245 million in refunds to consumers for allegedly deceptive user-interface design choices, CNN reported.

The FTC accused Epic Games of using "dark patterns," a design trick used to describe design elements that deceive the public into making harmful choices.

According to the agency, Epic Games made it harder to cancel purchases of "Fortnite's" in-game items by placing the option at the bottom of the screen and requiring users to push and hold a button on their controllers to cancel the transaction.

The complaint and proposed settlement dealing with children's privacy was filed in the U.S. District Court for the Eastern District of North Carolina. The agreement is the largest administrative order in FTC history, according to the agency.

Once the court approves the agreement, it will prohibit the company from continuing to collect children's data without parental consent. It would also require Epic Games to maintain a default privacy setting that protects the privacy of young gamers.

FTC chairperson Lina Khan said the agency prioritizes protections for children from dark patterns and online privacy invasions.

"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," Khan said in a statement.

Associate Attorney General Vanita Gupta said the order sends a message to all online companies that they would not tolerate collecting children's personal data without parental consent, Law and Crime reported.

In a statement, Epic Games agreed with the FTC to implement a feature explicitly asking "Fortnite" gamers whether to save their payment information for future transactions. The feature is now live.

Epic Games also released a new type of account that allows underage players to play "Fortnite" without certain features such as chat and purchases.