Epic Games to pay $520 million over children’s privacy and trickery charges

Some children also racked up hundreds of dollars on their parents’ credit cards as they bought digital items like colorful outfits for their game characters. Those purchases, along with branded merchandise like action figures, helped make Fortnite a billion-dollar blockbuster for Epic Games, with more than 400 million users.

On Monday, the Federal Trade Commission accused the company of illegally collecting children’s personal information, of harming young players by matching them with strangers on Fortnite while enabling live communications and, separately, of using manipulative techniques, called “dark patterns,” to trick millions of players into making unintentional purchases. In a historic deal that puts the entire video game industry on notice, Epic agreed to pay a record $520 million in fines and refunds to settle the FTC’s accusations.

The crackdown is the latest indication that the agency is following through on pledges by Lina M. Khan, its chair, to take a more assertive stance toward regulating the tech industry. Earlier this month, the agency made an aggressive move to stop consolidation among video game makers when it filed a lawsuit to try to block Microsoft’s $69 billion acquisition of Activision Blizzard, the company behind the popular Call of Duty franchise.

Epic Games said in a statement that it had instituted multiple children’s privacy and purchasing safeguards over the years and that “the practices referenced in the FTC’s complaints are not how Fortnite operates.”

The company’s proposed settlement agreements with the FTC involve record amounts in two separate cases.

Epic agreed to pay $275 million to settle regulators’ accusations that it violated a federal law, the Children’s Online Privacy Protection Act, by collecting personal information from children younger than 13 who played Fortnite without obtaining verifiable consent from a parent.

In addition, the company made parents “jump through hoops” to have their children’s data deleted and sometimes failed to honor parents’ deletion requests, the agency said in a legal complaint filed on Monday in U.S. District Court for the Eastern District of North Carolina, where Epic is based.

This article originally appeared in The New York Times.