The U.S. Federal Trade Commission Reached an agreement with Epic Games The company violated the Children’s Online Privacy Protection Act (COPPA), dark pattern (UI design tricks to trick users) Trick players into buying.
There are two settlements. Epic will pay him a $275 million fine for violating COPPA regulations. As part of the deal, Epic will also adopt “strong privacy defaults for the child and his teens.” This means that voice and text communications are turned off by default.
The second part is that Epic will pay $245 million to refund consumers affected by Fortnite’s “dark patterns and billing practices.”This is the biggest refund he’s ever gotten the FTC for a video game issue
“As our complaint points out, Epic used privacy-invading default settings and a fake interface that deceives Fortnite users, including teens and children,” the FTC chairman said. Lina M. Khan said. âProtecting the general public, especially children, from online privacy breaches and dark patterns is a top priority for the Commission, and these enforcement actions demonstrate that the FTC is cracking down on these illegal activities. is clearly shown.â
The FTC has filed two separate complaints against Epic in federal court, the first alleging that Epic, via Fortnite, violated COPPA rules, alleging that it “notifies or obtains from parents.” We collected personal information from children under the age of 13 who played Fortnite, an online service for children, without consent.” verifiable consent of their parentsâ. It further claimed a violation of the FTC law’s prohibition against unfair practices “by enabling real-time voice and text chat communications for children and teens by default.”
The FTC says (I’m paraphrasing, obviously) that Epic knew that the majority of Fortnite’s audience was children and didn’t take this seriously enough. It also said that Epic “was forced through absurd circles by parents who requested that their children’s personal information be deleted, sometimes failing to honor such requests.”
This is just like ringing the alarm bells of regulators. The FTC also said that the default setting, along with the nature of the game, which matches players with strangers, means that children and teens can be “bullied, threatened, harassed, and subjected to dangerous and mental health issues such as suicide in Fortnite.” âThis has led to exposure to traumatic problemsâ.
Interestingly, one of the key pieces of evidence supporting this was Epic’s own concerns. As of 2017, Epic employees had internally expressed concerns about audience composition and default settings. Epic made it difficult for users to find it.”
The Dark Patterns aspect concerns whether Fortnite tricked players into making purchases. He said there may be a charge. I am trying to preview an item.
Part of this is due to the scarcity of checks when purchasing V-Bucks, Fortnite’s in-game currency, until 2018, so once an account is linked to a payment method, children can buy V-Bucks unknowingly to their parents. Similar claims have been made against other big tech companies in various contexts, most notably Apple and the App Store.
wait, there’s more. The FTC alleged that Epic locked the accounts of customers who disputed such charges directly through their credit card companies, locking out previously purchased content. Even when Epic agrees to unlock accounts, users are apparently warned that they risk having their accounts permanently banned if they dispute future charges. It “ignored” over 100,000 user complaints and internal warnings, and according to the FTC, “deliberately hides the cancellation and refund functionality to make it harder to find.”
The settlement accepted by the FTC prohibits Epic from blocking customers who dispute fraudulent charges and prohibits the use of dark patterns. Epic must also seek your affirmative consent before billing you. The proposed agreement will soon be published in the Federal Register and will be open for public comment for 30 days. The committee will then decide whether to make the order final.
This is a lot of information, and a fair amount of context needs to be considered before arriving at Epic’s answer. The first is that this is mostly historical behavior. It must be said that Epic has clearly cleaned up its act in some respects, and was also dealing with a success it did not anticipate or prepare for. It doesn’t excuse the territory they’re treading on, but if the FTC and Epic are reaching an agreement rather than following an adversarial route, it suggests that publishers have belatedly realized they made a mistake. I’m here.
Epic’s response comes with a statement It argues how and why this happened, and what it intends to do in the future, before announcing the settlement.
âNo developer creates a game with the intention of ending up here,â read an Epic statement, before describing the gaming industry simply as a fast-moving, innovative space that is ahead of the law. “Written decades ago” [that] Don’t specify how the game’s ecosystem works. The law has not changed, but its application has evolved and long-standing industry practice is no longer sufficient. â
Epic also outlines some of the ways they changed their payment and refund system. Some changes were made years ago, others more recently. All of them are now within the FTC’s acceptable range. This includes a “hold to buy” system to prevent users from accidentally buying something with a single click. Regarding banning accounts that dispute charges through banks, Epic said it has changed its chargeback policy to “consider scenarios not related to fraud and only disable accounts if there is an indication of fraud.” said. It said it has restored “thousands” of accounts previously banned under this policy.
Regarding the child privacy aspect, Epic said: Act (COPPA)â. So while Fortnite was rated as his teen and aimed at an older audience, the audience it found was younger than expected.
In addition, it lists newer measures, such as “Cabined” accounts for users under the age of 13 and new default communication settings. Epic’s feature list for young Fortnite players includes:
- Parental controls easily accessible from Fortnite’s main lobby menu and Epic account portal.
- Parental controls including the option to require a PIN to send and approve friend requests. Allow parents to approve purchases prior to purchase.
- Daily spending limits for players under the age of 13.
- Advanced privacy options for chats, including “everyone”, “friends and teammates”, “friends only”, and “none”.
- Cabin accounts that offer young players a customized experience that is safe and inclusive while awaiting parental consent.
- We default to the best privacy options for players under the age of 18. Voice chat and text chat default to “Nobody”.
“The old status quo of in-game commerce and privacy is changing, requiring many developers to rethink their practices,” the publisher said. There’s also a slight sense of responsibility here, not just for their own games, but for the wider industry. , and Epic’s statement makes it clear that other developers should view this example with extreme caution.
Epic CEO Tim Sweeney shared some thoughts on social media. Here, Epic could detect a vague hint of resentment for being left with a can.
âDevelopers should delve into this topic, as this settlement reflects state-of-the-art American regulatory practices. I am applying.” Sweeney writes“In-app purchases are also a hot topic, with strong expectations of ‘positive explicit consent’ for purchases made with both real money and paid virtual currency.”
The world’s smallest violin is now playing at Epic. The publisher may be making a strong case for elements of the FTC’s indictment, but it’s also being used as an example to drive broader industry change that regulators want to see. Other companies are weighing the scale of this settlement, and a number of development studios are scheduled to meet tomorrow morning to discuss default account settings and microtransaction pathways.
While it may ultimately hurt revenue, Epic has the money and the FTC ruling won’t affect Fortnite’s popularity. And you’re right about having to deal with a decade-old law that never imagined an entertainment product like Fortnite. However, as this shows, just because you temporarily stepped forward doesn’t mean the man will eventually not catch up.
