On Monday morning, the FTC announced that it would be charging Epic Games a settlement fee of $520 million to resolve charges involving the privacy of children. The FTC claimed in a press release that Epic Games, the developer of hit games like “Fortnite” and “Fall Guys” that are suitable for players of all ages, violated COPPA by using “design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases.”
The $520 million is being paid out in two separate settlements, with the COPPA settlement being the larger of the two at $275 million. This is the largest penalty ever levied by the FTC for a violation of its regulations. According to the FTC’s proposal, Epic should reimburse customers $245 million for “dark patterns and billing practises.” That amount would be the largest ever eve refund paid to the FTC in a gaming case if paid by Epic Games.
The FTC complained that Epic’s default-enabled live text and voice communication features made it too easy for children to make online purchases. Since Epic had no way of ensuring that children and adults would not be matched together in online play, the FTC claims that children were exposed to harassment and abuse because of these features. As stated in a press release issued by the FTC, the game has been linked to instances of bullying, threats, harassment, and “psychologically traumatising issues such as suicide” among children.
Epic has raised over $3 billion in venture capital over the past two years, valuing the company at $31.5 billion at its most recent funding round. Epic Games is collaborating with Lego, whose parent company has invested $1 billion, to create a safe and welcoming online environment for children.
Additionally, Epic Games is suing Apple, claiming that the tech giant is engaging in anti-competitive practises. To avoid Apple’s 30% cut, the video game developer took issue with Apple’s policy that allows it to pull products from the iOS App Store if the app redirects customers away from in-app purchases.
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