Record-breaking Epic Games fine exposes the pervasive use of deceptive design in gaming

In what could be a wake-up call for companies employing deceptive design practices, Epic Games has agreed to pay $520 million to settle two complaints from the Federal Trade Commission (FTC).  

The video game maker, which powers Fortnite and other popular games, will pay $275 million in response to FTC allegations that it violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal information from children younger than 13 years old without notifying parents or securing their consent. This is the largest penalty to date for violating an FTC rule, the agency said.

Epic Games will pay another record-breaking sum of $245 million in refunds to consumers for its “dark patterns and billing practices, which is the FTC’s largest refund amount in a gaming case, and its largest administrative order in history,” according to the commission’s release. “Epic put children and teens at risk through its lax privacy practices, and cost consumers millions in illegal charges through its use of dark patterns,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. 

Going forward, the company will be required to adjust its privacy settings and turn off voice and text communications by default for children and teens (changes Epic says it already made). In addition, the FTC will distribute refunds to Fortnite gamers and parents who were affected by the company’s billing and refund practices.  

“No developer creates a game with the intention of ending up here,” Epic Games published in a post on its site, adding: “We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”  

Deceptive design has emerged as an increasing area of focus for the FTC this year. In September, the agency released a report highlighting various kinds of “dark patterns,” which include “masquer-ads” (advertising disguised as editorial content) and tricking users into making payments or sharing personal data.

In the case of Epic Games, the FTC reports that ignored complaints from users and employees led to a “huge” sum of wrongful charges. “Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button,” the FTC release included.  

Scott Goodstein, an associate attorney at Semple, Farrington, Everall & Case, wrote about the regulation of “dark patterns” for the University of Colorado Law Review early last year. Speaking with Fast Company by phone, he pointed to designer Harry Brignull’s description of the “roach motel,” a kind of deceptive design that makes entering a particular agreement easy and getting out of it difficult. “Based on what the FTC is alleging, it seems like Epic was aware of how difficult, for example, it was to request refunds,” Goodstein says.  

FTC chair Lina M. Khan says that combating deceptive design and privacy issues, especially when it affects children, is a top concern: “These enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices.”