Fortnite, the popular online video game developed by Epic Games, found itself in legal trouble and agreed to pay approximately $520 million as part of a settlement with the Federal Trade Commission (FTC). This hefty sum was a result of allegations that Fortnite had violated children’s privacy laws and engaged in deceptive practices, including misleading gaming features that led players to spend millions of dollars.
One of the major issues raised by the FTC was Fortnite’s handling of children’s personal information. The game reportedly collected data from its young players without obtaining proper consent from their parents or guardians. This raised concerns about the privacy and security of the children involved. The FTC alleged that Epic Games failed to implement adequate safeguards to protect this sensitive information, which violated the Children’s Online Privacy Protection Act (COPPA).
COPPA is a federal law designed to protect the privacy of children under the age of 13 online. It requires websites and online services to obtain verifiable parental consent before collecting personal information from children. The law also mandates the establishment of reasonable security measures to protect such data. In this case, Fortnite was accused of not complying with these requirements, resulting in the significant financial penalty.
In addition to the privacy violation, Fortnite was also accused of employing deceptive practices to entice players to spend money on in-game purchases. The game features various virtual items and upgrades that players can buy using real money. The FTC alleged that Fortnite used manipulative tactics to encourage players, including children, to make these purchases. They claimed that the game’s design intentionally misled and pressured players into spending money, often without the necessary consent from parents or guardians.
One common tactic used by Fortnite was the introduction of “loot boxes” or “loot llamas” that contained random virtual items. These loot boxes were marketed as a surprise and encouraged players to spend money to unlock them in the hope of obtaining rare or desirable items. The FTC argued that this mechanic resembled gambling, as players were enticed to spend more money in pursuit of these coveted items. The lack of transparency surrounding the odds of obtaining specific items further exacerbated the issue.
The combination of these alleged privacy violations and deceptive practices led to the substantial settlement amount. The $520 million payment includes $300 million for the COPPA violations and $220 million for the deceptive practices. Additionally, as part of the settlement, Epic Games is now required to implement significant changes to its business practices. They must establish a comprehensive privacy program, obtain parental consent before collecting personal information from children, and ensure clear and accurate disclosure of in-app purchases.
The Fortnite lawsuit and subsequent settlement serve as a reminder of the importance of protecting children’s privacy online and the need for transparency in the gaming industry. It highlights the potential risks associated with popular online games that attract a significant number of young players. By holding companies accountable for their actions and imposing substantial penalties, the FTC aims to safeguard the privacy and financial well-being of children and their families.