Penalty Amount
$275,000,000
Epic Games, maker of Fortnite, violated children's privacy laws by collecting data from under-13 users without parental consent and used deceptive designs to trick users into unintended purchases. The FTC secured a $275 million civil penalty and $245 million in consumer refunds, with requirements to enhance privacy defaults, delete improperly collected data, implement a privacy program, and prohibit dark patterns and account locking for charge disputes.
Epic must pay a $275 million penalty to the U.S. Treasury, provide $245 million in refunds to consumers, delete personal information collected from children without parental consent, implement a comprehensive privacy program with independent audits, change default privacy settings to turn off voice and text communications for children and teens unless affirmatively consented, and is prohibited from using dark patterns to induce purchases or blocking account access for disputed charges.
In-house legal teams should review all customer-facing agreements, particularly Terms of Service (ToS), End User License Agreements (EULA), and in-app purchase/billing terms for users of any online service or game. Key clauses to scrutinize include: (1) consent mechanisms for data collection, especially for users identified or likely to be under 13, ensuring they mandate verifiable parental consent; (2) billing and purchase clauses to identify and eliminate 'dark patterns'—deceptive UI/UX designs that trick users into unintended charges; (3) account management terms that prohibit locking or restricting accounts for disputing charges; (4) data handling and retention clauses to ensure improper children's data is deleted and collection is limited; and (5) privacy setting clauses to enforce strong defaults for minors (e.g., disabling voice/text chat). Changes will likely involve rewriting consent flows, redesigning purchase interfaces for clarity, implementing robust refund processes, and establishing enforceable privacy-by-default configurations for younger users.
Entity
Epic Games, Inc.
Also known as: Epic Games
Industry
GamingOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2022/12/fortnite-video-game-maker-epic-games-pay-more-half-billion-dollars-over-ftc-allegations
2223087EpicGamesComplaint
https://www.ftc.gov/system/files/ftc_gov/pdf/2223087EpicGamesComplaint.pdf
2223087EpicGamesSettlement
https://www.ftc.gov/system/files/ftc_gov/pdf/2223087EpicGamesSettlement.pdf
1923203EpicGamesComplaint
https://www.ftc.gov/system/files/ftc_gov/pdf/1923203EpicGamesComplaint.pdf
1923203EpicGamesACCO
https://www.ftc.gov/system/files/ftc_gov/pdf/1923203EpicGamesACCO.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Epic Games, Inc., creator of the popular video game Fortnite"
"Epic will pay a $275 million penalty"
"violated the Children’s Online Privacy Protection Act (COPPA)"
"FTC Act’s prohibition against unfair practices"
"violated the COPPA Rule"
"collecting personal information from children under 13 who played Fortnite, a child-directed online service, without notifying their parents or obtaining their parents’ verifiable consent."
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$106.8M
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