The maker of popular video game Fortnite has agreed to pay $520m (£427m) to resolve claims from US regulators that it violated child privacy laws and tricked users into making purchases.
The Federal Trade Commission (FTC) said the firm duped players with “deceptive interfaces” that could trigger purchases while the game loaded.
It also accused it of using “privacy-invasive” default settings.
Epic Games blamed “past designs”.
“No developer creates a game with the intention of ending up here,” the company said. “We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”
Fortnite, a battle royale game that became a global sensation after its launch in 2017, has more than 400 million players around the world. The game is generally free to download, but makes money from in-game purchases of items such as costumes and dance moves.
The FTC said that the game, which matches strangers around the world for interactive battles, was aimed at children and teens, but despite that, its developers failed to comply with rules regarding parental consent – even after making changes to address internal and public concerns.
“As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,” said FTC chair Lina Khan.
“Protecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the commission, and these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices.”
The FTC said Epic would pay $275m – a record penalty for the consumer watchdog – to resolve the claims it collected child and teen data without parental consent, and exposed children and teens to bullying and harassment by turning on voice and text communications by default.
Epic Games agreed to change its privacy settings for teens and children, and have chat communications turned off by default.
The company will also pay a record $245m, to be used for refunds to customers, to settle a separate complaint about deceptive billing practices.
The FTC cited a “counterintuitive, inconsistent, and confusing button configuration” that led to hundreds of millions of dollars in unauthorised purchases.
It said the firm had resisted changing its design to add a separate confirmation step, worried that doing so “would add ‘friction’, ‘result in a decent number of people second guessing their purchase’, and reduce the number of ‘impulse purchases'”, according to the complaint.
It said the company locked accounts of customers who disputed charges and “purposefully obscured cancel and refund features to make them more difficult to find”.
Epic said it had been making changes and the practices detailed in the FTC’s complaints were “not how Fortnite operates”.
“The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough,” the company said, adding that it hoped to offer a model for the rest of the industry.
News Source: BBC