Epic Games, maker of "Fortnite," to pay $520M to settle FTC claims

Epic Games Inc. has agreed to pay $520 million to settle Federal Trade Commission allegations that it violated online privacy protections for children and tricked players into making unintended purchases.

The FTC stated that the agreement included two record-breaking settlements that resolved two civil complaints it filed against Epic. One lawsuit, filed in federal court, alleged the company violated the federal Children's Online Privacy Protection Act by collecting personal information from "Fortnite" players under 13 without notifying their parents or obtaining verifiable parental consent.

Additionally, the company was accused of illegally enabling real-time voice and text chat for children and adolescents in the game. In addition, according to the FTC, Epic put these users at risk by connecting them with strangers; as a result, some were "bullied, threatened, harassed, and exposed to dangerous and psychologically traumatic issues such as suicide."

According to the FTC, the company will pay a civil penalty of $275 million for the alleged COPPA violations, the largest penalty ever assessed by the commission in its enforcement of the privacy law.

Separately, the company agreed to pay $245 million in consumer refunds to resolve the FTC's second administrative court complaint. It is the largest settlement ever reached by the FTC and prohibits the use of so-called "dark patterns," which trap customers into paying for goods and services and make cancellation difficult.