Epic Games Agrees To Pay $520Million Over Allegations Of Privacy Violations And Unwanted Charges
Fortnite developer Epic Games settles Federal Trade Commission (FTC) case for $520M
Epic Games, the developer and publisher of the highly popular online video game Fortnite, has reached a settlement with the Federal Trade Commission (FTC) over alleged privacy violations and unintended purchases made by minors in the game.
The FTC announced on Monday that Epic Games had agreed to pay $520 million to settle allegations that the company violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal information from children without their parent’s consent. The settlement also covers allegations that the company failed to properly disclose how much virtual currency would be charged for certain in-game items and allowed minors to make unintended purchases without parental authorization.
Under the terms of the settlement, Epic Games will pay a civil penalty of $136 million, create a $50 million fund to reimburse consumers for any unauthorized purchases made by minors, and provide an additional $334 million in compensation for consumers who purchased certain in-game items without knowing their true cost.
In addition to the monetary settlement, Epic Games has also agreed to implement a number of changes to its policies and practices related to children’s online privacy and in-game purchases. These changes include implementing age verification systems to ensure that only users over the age of 13 can access Fortnite, providing more detailed disclosures about the costs of in-game items, and creating a system to allow parents to monitor and restrict the amount of time their children spend playing the game.
The FTC Commissioner Rohit Chopra said in a statement that “children in our digital world face an unprecedented risk of exploitation and harm, and this settlement demonstrates the Commission’s commitment to protecting kids online.” He added that the settlement should serve as a warning to other companies that they must comply with COPPA and take steps to protect children’s privacy.
The settlement is just the latest in a series of actions taken by the FTC against companies accused of violating children’s online privacy. Earlier this year, the agency reached a $170 million settlement with YouTube over similar allegations and has taken action against other tech companies such as TikTok, Musical.ly, and Google.
Who is Epic Games?
Epic Games is a very popular American video game developer as well as publisher that is based in Cary, North Carolina. Founded back in 1991, the company has developed many popular franchises such as Fortnite, Fall Guys, and Rocket League. Epic Games is renowned for groundbreaking graphics technology and its user-friendly distribution platform – the Epic Games Store. With more than 400 million registered users making it is one of the most popular digital stores in the gaming industry.