In late 2022, the Federal Trade Commission (FTC) decided to impose a $520 million fine on Epic Games, one of the producers of Fortnite, for unfair practices that violate consumer rights. According to the FTC's decision, Epic Games engaged in the practice of charging user accounts without their knowledge or consent between 2017 and 2022. Users wishing to have an account in one of Epic Games' games were required to provide a credit card number to register an account. This was intended, among other things, to facilitate payment for additional products that facilitated gaming. Unfortunately, this arrangement led to many users' accounts being charged without authorization. Furthermore, user accounts were charged regardless of whether the user purchased any product. Furthermore, Epic Games is accused of placing purchase buttons in locations (e.g., on the game controller) that could cause players to mistakenly purchase the product. Taking this into account, the FTC decided to oblige Epic Games to pay $520 million for violations of consumer rights and unfair practices.
Ultimately, Epic Games reached a settlement with the FTC, agreeing to pay a $245 million fine, all of which will be distributed to consumers who suffered losses related to Epic Games' actions. In its decision, the FTC outlined the list of individuals eligible to seek reimbursement. This includes:
- Parents who created accounts for their children and then had funds withdrawn from their accounts without their explicit consent.
- Users who disputed the charge on their accounts and subsequently had their accounts blocked.
- Users who purchased products due to Epic Games' use of so-called Dark Patterns, techniques and tricks intended to encourage users to purchase certain products.
The FTC's decision will undoubtedly impact gaming industry players, with many deciding to improve their payment security systems or implement new ones.
This alert is for informational purposes only and does not constitute legal advice.
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