Amanda Meyer

Associate Editor

Loyola University Chicago School of Law, JD 2025

The FTC has settled its largest refund amount and established its largest administrative order in the history of the department and gaming industry. This settlement and administrative order were both with gaming giant, Epic Games. Epic Games is the owner of video games such as Gears of War, Dauntless, and Fortnite. The company has an estimated yearly gross income of $907 million a year, with a vast majority of its revenue coming from Fortnite. Fortnite is Epic Games’s most popular game, with over 400 million users worldwide, many of those users being young adults and teens.

Fortnite is a battle royale style game, where people’s characters fight each with various weapons. Players are placed in an area with other gamers and can interact with each other through text or voice chat. Generally, the players who interact with each other are complete strangers.

In addition to the text and chat features, players can customize their characters through the use of “skins”, emotes, and “items” Skins and items can either change their character’s outfit or completely change the look of the character. Items include virtual backpacks called “Backblings” and pickaxes, used as an early-game weapon. Some examples of Fortnite skins include making your character look like an animated mallard duck, a ninja turtle, or even Arnold Schwarzenegger from the Terminator. Emotes are personalized actions that your character can act out, such as giving a thumbs up and waving. There are currently 1,788 skins, 875 emotes and 2,532 items in Fortnite, each contributing to a grand total of 10,283 cosmetics, and all of them require purchasing either with in-game currency, called V-Bucks (which can be purchased with real-world money) or real-world money. Fortnite itself is free to download and play.

FTC’s first settlement: unwanted purchases and dark patterns

FTC reached a settlement with Epic games regarding Fortnite and its use of design tricks to compel consumers of all ages to make unwanted in-game purchases. The complaint for unwanted purchases and deception was first announced in December 2022, and Epic Games quickly settled that complaint for $245 million. These tricks were generally aimed at younger gamers and made it easy for children and teenagers to make purchases with their parents’ credit cards without parental consent. Some examples of these tricks include:

• Saving the player’s credit card information without their knowledge or consent, to later bill other purchases on.
• Having the ability to purchase V-Bucks without parental or cardholder consent simply by pressing buttons. These purchases did not require cardholders to enter a pin or a password to signify authorization of the purchase.
• Epic Games then added a small checkbox to establish that that payment would be a “one-time payment.” If consumers did not see the checkbox, then their credit card information would be saved again.
• Finally, Epic games would lock accounts of the individuals who disputed those unauthorized changes with their credit card companies.

There were also complaints made by employees regarding these practices. Epic Games ignored these complaints before they reached their settlement with the FTC. The money obtained from that settlement will be provided as a refund to consumers who fell victim to these unauthorized charges. Many of these victims being parents of kids, in addition to whoever unintentionally made in-game purchases in Fortnite. The FTC has notified over 37 million people by email of their eligibility in collecting these refunds. Consumers had until January 17, 2024 to make a claim to the FTC.

FTC’s second settlement: violation of children’s privacy (COPPA)

The second settlement is $275 million and it involves Epic Games’s violation of the Children’s Online Privacy Protection Act (COPPA). It is currently the largest monetary penalty for violating an FTC rule. As a result of the settlement, Epic Games is required to enable more privacy default settings to protect children and teens. Most importantly, it will turn text and voice chat off by default.  Formerly, Fortnite’s default settings were to enable voice and text, sometimes without the children’s knowledge or permission. This harms children because they are more susceptible to online bullying and harassment from other players. Although there is a button to turn voice and chat off, Epic had made it difficult to find. In addition, Epic Games was also obtaining children’s personal information without parental consent and made it difficult for parents to request their children’s personal information to be deleted, forcing parents to jump through numerous administrative hoops in order to protect their children’s privacy.

Conclusion

Children, teens, and young adults are not only Epic Games’s largest demographic of Fortnite players, but they are also the most vulnerable group of gamers. Epic Games has failed to protect this group’s privacy by allowing voice and text, which often leads to bullying and harassment from online strangers. In addition, they have also exploited these young adults and their vulnerability by deceiving them into purchasing items they would not have otherwise bought.