FTC slaps Epic Games with $520 million in fines over children’s privacy and payment practices!

When you’re making one of the most popular games on the planet, the stakes get even higher than usual. However, even for Epic Games, $520 million is a big pill to swallow. This is the amount Fortnite creators are being forced to pay to the Federal Trade Commission (FTC) in the US as part of a historic settlement that could have huge ramifications for the gaming industry.

Epic Games chose to settle after the Federal Trade Commission investigated the company’s practices, which relate to data handling and how the company handles personal data of children under 13. The FTC alleged that not only did Epic Games collect data on children playing Fortnite without notifying their parents or obtaining verifiable parental consent, but they also put those children at risk for in-game bullying and harassment by connecting them with strangers via voice and text chat.

These violations of the Children’s Online Privacy Protection Act (COPPA) resulted in Epic being fined $275 million, the largest fine in the history of the law. However, this wasn’t the end of Epic’s troubles with the FTC. Another $245 million will be paid by Epic Games as part of the settlement due to the way they handled customer refunds.

The FTC alleged that the company used deceptive tactics to trap customers into payment structures and make it difficult or impossible to cancel ongoing payments. The $245 million collected as part of the refunds will be distributed to players who filed a complaint against Epic, largely at the FTC’s discretion.

For their part, Epic has done little to accept responsibility for their actions, arguing in a Statement made on their website They “accepted this agreement because they want Epic to be at the forefront of customer protection” and not because fighting it would result in a bigger fine or worse publicity. They argued that they were the victims of a rapidly changing industry and legislation that was struggling to keep up. The statement also mentions that Fortnite is rated as Teen, but that’s not enough to guarantee that young adults won’t play it, which is why they created the Restricted Account System, which was recently implemented to help the company comply with exactly this type of regulation.

Other developers will be watching this story closely because other regulators around the world have similar issues with games like Fortnite. We expect to see similar measures for closed accounts rolled out among other games targeted at or heavily played by children soon as companies try to avoid similar fines.

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