Privacy & Cybersecurity Law Blog

On December 19, 2022, the Federal Trade Commission announced two settlements, amounting to $520 million, with Epic Games, Inc. in connection with alleged violations of the Children’s Online Privacy Protection Act Rule (the “COPPA Rule”) and alleged use of “dark patterns” relating to in-game purchases.

The first action arises from a complaint and proposed order filed in federal court by the Department of Justice on behalf of FTC. The federal court complaint contains two counts: (1) that Epic Games violated the COPPA Rule by operating video game Fortnite, which the FTC alleges is “directed to children,” and (2) that Epic’s on-by-default text and voice settings violated Section 5 of the FTC Act. The proposed settlement sets forth injunctive relief and if approved, would require Epic Games to pay $275 million as a civil penalty.

The second action arises from a complaint and proposed order filed by the FTC in its administrative forum. The complaint alleges that Epic Games used certain design features to lead consumers to make in-game purchases without first providing their express informed consent. It also alleges that Epic Games denied consumers access to their Fortnite accounts for disputing unauthorized charges. If approved, the proposed administrative settlement would require Epic to pay $245 million in consumer refunds.