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# Epic Games Agrees to $520 Million FTC Settlement Over Children’s Privacy and Fortnite Billing Practices
- URL: https://www.theamericanquorum.com/taq-historical-2022-12-24-tech/
- Published: 2022-12-25T04:59:00.000Z
- Updated: 2022-12-25T04:59:00.000Z
- Description: Epic Games agreed to $520 million in FTC settlements, including a record $275 million COPPA penalty and $245 million for consumer refunds tied to Fortnite billing practices.
- Author: Kenneth R. Deans Jr.
- Tags: Tech, #Import 2026-08-31 20:04

WASHINGTON — Epic Games has agreed to pay a combined $520 million to resolve two Federal Trade Commission cases involving Fortnite, including a record $275 million civil penalty over alleged violations of children’s privacy law and $245 million that will be used for refunds to consumers the agency says were charged through deceptive interface and billing practices. The [FTC announced](https://www.ftc.gov/news-events/news/press-releases/2022/12/fortnite-video-game-maker-epic-games-pay-more-half-billion-dollars-over-ftc-allegations?ref=theamericanquorum.com) the agreements Monday, making the settlement one of the largest consumer-protection actions ever brought against a video-game company.

The cases are legally distinct but technologically connected. One concerns how Fortnite collected information from children and enabled voice and text communications by default; the other concerns the design of the game’s purchase flow, refund mechanisms and account-dispute practices. Together, they put user-interface design, child privacy and in-game commerce at the center of federal technology enforcement.

## A $275 million children’s-privacy penalty

The Department of Justice, acting on the FTC’s referral, filed a federal complaint alleging that Epic violated the Children’s Online Privacy Protection Act and its implementing rule. Under the proposed settlement, Epic will pay a [$275 million civil penalty](https://www.justice.gov/archives/opa/pr/epic-games-inc-developer-fortnite-video-game-agrees-275-million-penalty-and-injunction?ref=theamericanquorum.com), which DOJ describes as the largest penalty ever imposed for a COPPA violation. The proposed injunction also requires changes to how the company handles children’s personal information and privacy settings.

The government alleges that Epic knew Fortnite attracted children but collected personal information without first obtaining verifiable parental consent as required by COPPA. It also objects to default settings that allowed real-time voice and text communications for children and teenagers, creating privacy and safety concerns. The FTC’s [federal-case materials](https://www.ftc.gov/legal-library/browse/cases-proceedings/epic-games-inc-us-v-timeline-item-2022-12-19?ref=theamericanquorum.com) include the complaint and proposed stipulated order governing future compliance.

The order would require Epic to delete certain previously collected information unless the company obtains parental consent or the user identifies as 13 or older. It also calls for privacy-protective default settings for children and teens, along with a comprehensive privacy program and regular compliance reporting.

Epic says it has already changed significant parts of its systems. In its [response to the settlement](https://www.epicgames.com/site/news/epic-ftc-settlement-and-moving-beyond-long-standing-industry-practices?ref=theamericanquorum.com), the company said it accepted the agreements and is moving beyond practices that had become common across digital gaming. Epic pointed to new parental controls, age-related settings and features intended to create safer experiences for younger users.

## $245 million for consumers and a case about interface design

The second action focuses on what regulators call “dark patterns” — interface choices designed or structured in ways that can subvert a consumer’s intended decision. The FTC alleges Fortnite’s purchase system made it too easy for users, including children, to incur unwanted charges with a single button press and that the company used inconsistent button configurations that could convert an attempt to preview an item into an immediate purchase.

The agency’s [administrative case](https://www.ftc.gov/legal-library/browse/cases-proceedings/epic-games-matter-timeline-item-2022-12-19?ref=theamericanquorum.com) alleges that users could be charged while navigating menus, waking the game from sleep mode or interacting with interfaces in which purchase and preview functions were placed close together or mapped inconsistently. The settlement requires Epic to pay $245 million, which the FTC will use to provide refunds to affected consumers.

The FTC says Epic received more than one million complaints about unwanted charges and that company employees themselves raised concerns about portions of the purchase flow. A contemporaneous [FTC business guidance account](https://www.ftc.gov/business-guidance/blog/2022/12/245-million-ftc-settlement-alleges-fortnite-owner-epic-games-used-digital-dark-patterns-charge?ref=theamericanquorum.com) describes allegations that Epic saved payment credentials by default, did not consistently require confirmation before purchases and made some refund paths difficult to locate.

The proposed administrative order also restricts Epic from using dark patterns to obtain consent for charges and changes how the company may respond when customers dispute unauthorized transactions. The FTC alleges that Epic had locked some users out of accounts after credit-card chargebacks, even when the disputed transaction did not involve all of the digital items associated with the account.

## A broader federal focus on dark patterns

The Fortnite case is part of a wider FTC campaign against digital designs that manipulate choice. In September the agency issued [Bringing Dark Patterns to Light](https://www.ftc.gov/reports/bringing-dark-patterns-light?ref=theamericanquorum.com), a staff report examining tactics such as disguised advertising, hidden fees, difficult cancellation processes and interfaces that steer users toward sharing data or making purchases they did not intend.

The report matters because it frames interface design as a potential consumer-protection issue rather than merely a product-design question. A button label, default setting, placement of a confirmation screen or path to a refund can determine whether a consumer meaningfully consents. The government’s case against Epic applies that theory to an enormous gaming platform with more than 400 million registered users.

That approach has implications beyond Fortnite. Many games and apps use virtual currencies, one-click payments, subscriptions, loot systems and saved billing credentials. Children can move through these systems quickly, while parents may see the financial consequence only after receiving a statement or notification. Regulators are signaling that companies cannot treat frictionless purchasing as an unqualified design goal when the same friction reduction makes accidental or unauthorized transactions more likely.

## Epic accepts the settlement while disputing the broader implication

Epic’s statement does not present the settlement as an admission that it intentionally harmed users. Instead, the company argues that digital commerce and gaming standards have evolved and that practices once common in the industry may no longer satisfy regulatory expectations. Epic says it has introduced purchase confirmations, expanded self-service refunds, changed chargeback policies and created “Cabined Accounts” for younger players with restricted features until parental consent is provided.

The size of the settlement nevertheless creates a clear compliance benchmark. The $275 million privacy penalty establishes a new high-water mark for COPPA enforcement, while the $245 million refund agreement shows that interface mechanics can carry direct financial consequences when regulators conclude that consumers were steered into unwanted transactions.

Fortnite remains one of the world’s largest online games, and the settlements do not require Epic to withdraw it or dismantle its in-game economy. What changes is the legal expectation around how that economy is operated. Privacy defaults, parental consent, purchase confirmation and refund access are no longer peripheral product decisions; in the FTC’s view, they are enforceable consumer-protection obligations. For the broader technology sector, that may be the most consequential part of the $520 million agreement.