Epic Games to Pay Record US Govt Settlement

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Facts

  • The US Federal Trade Commission (FTC) on Monday announced that Epic Games, creator of the popular game Fortnite, has agreed to pay a record $520M settlement over privacy violations related to minors.
  • Epic will pay a record $275M to settle FTC accusations of violations against the Children’s Online Privacy Protection Act. The FTC alleged Epic collected personal information from children younger than 13 who played Fortnite and made it difficult for children and their parents to get the data deleted.
  • Epic will pay $245M to settle a second complaint over consumers who claimed user-interface design choices, which the FTC described as deceptive, hurt them. That settlement will be paid out as refunds to users.
  • The FTC alleged that Epic caused “substantial injury” to children when it enabled live voice and text chats by default and matched minors with adults on Fortnite teams. This allegedly led to bullying and harassment in some cases.
  • Fortnite has at least 400M users around the world and made $3.7B in 2019 for Epic — which is valued at $32B by The Wall Street Journal. Epic neither explicitly confirmed nor denied the allegations as part of its settlement.

Sources: Reuters, New York Times, CNN, and NBC.

Narratives

  • Pro-establishment narrative, as provided by Tech Crunch. Even before agreeing to this settlement, Epic had been taking steps to protect children playing its games — including creating new options related to purchases and replenishments of accounts. The company has also created "Cabined Accounts," which automatically disables features, including chat and purchasing, for underage players. When it comes to consumer protection, Epic’s intention is to be a leader.
  • Establishment-critical narrative, as provided by Vox. Epic might be doing the right thing now, but for years it violated FTC statutes. This settlement shows the agency means business regarding protecting children from online privacy and questionable behavior. This should serve as a warning shot for other businesses that commit similar violations. The FTC should continue to crack down, and the Children’s Online Privacy Protection Act should be revised and enhanced.