Just in time for Christmas, the Federal Trade Commission has been making a list, checking it twice, and deciding that the maker of the wildly popular Fortnite video game, Epic Games, has been really, really naughty, fining the company $520 million over 'privacy-invasive default settings and deceptive interfaces' impacting millions of underage users. But if you thought that was bad, a Canadian court may be setting itself up to ruin Epic's 2023 Christmas even worse.
According to the voluntary ruling, Epic will pay $520 million in penalties and refunds to settle complaints revolving around children's privacy and its payment methods that allegedly tricked players into making unintended purchases, U.S. federal regulators said Monday.
The Federal Trade Commission reached the settlements to resolve two cases against Epic Games Inc., which has parlayed Fortnite's success in the past five years to become a video game powerhouse.
The $520 million covered in the settlement consists of $245 million in customer refunds and a $275 million fine for collecting personal information on Fortnite players under the age of 13 without informing their parents or getting their consent. Not surprisingly, this is the biggest penalty ever imposed for breaking an FTC rule.
Epic, based in North Carolina, has said in a statement it had already rolled out a series of changes "to ensure our ecosystem meets the expectations of our players and regulators, which we hope will be a helpful guide for others in our industry."
It also claims that it no longer engages in the practices flagged by the FTC.
However, the FTC fine may prove to be small in comparison to what is brewing north of the border.
Canadian Parents Lawsuit Allowed to Proceed
A class action lawsuit filed against Fortnite developer Epic Games by concerned Canadian parents has been allowed to go ahead, with a local judge ruling that the plaintiffs have a fair legal claim against the popular battle royale game.
Judge Sylvain Lussier ruled the claim ‘does not appear to be frivolous or manifestly ill-founded’ as the parents allegedly have a ‘valid product liability claim against the defendants.’ The primary claim is that Epic Games ‘knowingly’ developed Fortnite to be an addictive game, particularly for children.
‘The court concludes that there is a serious issue to be argued, supported by sufficient and specific allegations as to the existence of risks or even dangers arising from the use of Fortnite,’ Lussier said, per The Independent.
The plaintiffs state that the gameplay loop of Fortnite caused their children to suffer psychological and financial harm, with some refusing to eat, shower, or socialise in real life. These children have reportedly played thousands of hours of Fortnite, and spent hundreds of dollars on dances and special cosmetic items without their parents’ knowledge.
One child reportedly spent up to 7,781 hours in Fortnite over the space of two years.
According to the plaintiffs, this was a result of the addictive nature of Fortnite, and the machinations of Epic Games – rather than external factors.
While the Canadian court argued against the allegations of ‘deliberate creation of an addictive game’, it did agree that there was a possibility the game could be addictive, and that the game’s original designers knew this to be the case.
Why It Matters. Anyone who has kids or had kids or knows someone who has had kids knows how easily they can become obsessed with the latest fad or gadget. Whether it’s SpongeBob SquarePants or Legos or Blue’s Clues or Barbie or How Wheels or Gameboys or iPhones, the one truism of being around kids is that they will spend so much watching, playing, or engrossed in the thing that it will drive the adults in their lives to distraction. Of course, every company that relies on children as a primary