Epic FTC Settlement and moving beyond long-standing industry practices

Epic has reached a settlement with the Federal Trade Commission (FTC). In it, Epic will pay $245 million USD to the FTC to resolve concerns related to past designs of the Fortnite item shop and refund systems in Fortnite, which the FTC will use to distribute to Epic customers at their discretion. Epic will also pay $275 million USD to the FTC to resolve concerns related to children’s privacy in Fortnite. 

No developer creates a game with the intention of ending up here. The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount. Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players. 

Over the past few years, we’ve been making 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. 

Payment and refund systems

All game developers should rethink steps they’ve taken to simplify payment flows in favor of practices that provide the largest amount of clarity to players when they make purchase decisions. Saving payment information by default is a common way to streamline the checkout process, so players do not have to re-enter their payment method every time they make a purchase. We’ve agreed with the FTC to change this practice, and we now offer an explicit yes or no choice to save payment information. 

Pushing a button to complete a purchase is one of the most commonly used and easiest mechanics to complete online purchases. Games should go above and beyond to make sure players even more clearly understand when they are making a purchase with real money or with virtual currencies to prevent accidental purchases. We don’t want players to pay for something that they did not intend to. Since May 2018, Fortnite has had a refund token system and an undo-purchase system, but now we've gone further.  We’ve updated our payment flows with a hold-to-purchase mechanic that re-confirms a player’s intent to buy, as an additional safeguard to prevent unintended purchases alongside instant purchase cancellations and self-service refunds. 

There are many ways players may seek to refund purchases. Developers should consider avenues for players to request refunds that lie outside of the standard process. If a cardholder sees an unauthorized transaction on their statement, they may report it to their bank to have it reversed. When that chargeback is initiated, it is common industry practice to disable the associated account as a fraud prevention measure. We’ve updated our chargeback policy to account for non-fraud related scenarios and will only disable accounts when fraud indicators are present. We have restored thousands of accounts that were banned due to reported chargebacks under our previous policy. 

Children’s Privacy

Developers who create a teen-rated or mature-rated game can no longer assume that it won't be deemed to be directed to children, according to the United States’ Children’s Online Privacy Protection Act (COPPA). Younger players who are interested in higher-rated games can find ways to access them. Developers should proactively create age-appropriate ways for players to enjoy their games. 

Fortnite is rated Teen and is directed at an older teen and college-aged audience. We recently rolled out Cabined Accounts, a new type of Epic account that provides a tailored experience that is safe and inclusive for younger players. Players under 13, or their country’s age of digital consent, whichever is higher, will be able to play Fortnite while they wait for parental consent, but in a tailored environment where certain features, such as chat and purchasing, are disabled.

While game developers may be familiar with COPPA, they may not be aware of its global application. COPPA is just one of the many regulations addressing children’s privacy around the world, which are expanding to include teens. This means game developers should expand youth privacy protections to include players under 18. 

In September, we implemented high privacy default settings for players under the age of 18. Chat defaults to “Nobody," profile details default to hidden, parties default to “Invite Only," and personalized recommendations are defaulted Off. Players under 16 also have the mature language filter defaulted On for text chat.

Enhancing Fortnite over time

We’ve always taken a player-centric approach to building Fortnite. We’ve learned from our players and have continually enhanced our features, policies, and payment mechanics since Fortnite launched in 2017, and will continue to do so. 

There have never been pay-to-win or pay-to-progress mechanics in player-versus-player experiences in Fortnite.  And we eliminated paid random-item loot boxes in Fortnite: Save the World in 2019.

Fortnite has always respected console-level parental controls and in June of 2019 we introduced an additional layer of protection with in-game Epic Parental Controls. On platforms where Epic processes payments, our Parental Controls enable parents to authorize real money purchases before they are made and we recently implemented a daily spending limit for players under the age of 13. Epic Parental Controls have expanded to offer a permission that requires a parental PIN for players to send or accept Epic friend requests, and additional privacy options for chat. Parents can choose to enable voice chat with “Everybody," “Friends and Teammates,” “Friends Only,” or “Nobody,” a level of granularity that is rare in our industry. We also recently made our Parental Controls even easier to find in the Fortnite main Lobby menu.  

In summary, some of the payment and refund features that are live in Fortnite today include:  

• No pay-to-win or pay-to-progress mechanics in player-versus-player experiences.
• No paid random item loot boxes since 2019 and no gambling ever. 
• A Return Tickets system that enables self-service refunds on eligible digital goods without the need to specify a reason.  
• Instant cancellations of cosmetic purchases made with V-bucks, with a recently extended cancellation window. 
• A hold-to-purchase mechanic for all in-game purchases in Fortnite.
• An updated chargeback policy. 
• An explicit yes/no choice to save payment information.

And some of the features for younger players and their parents include:

• Parental Controls that are easily accessible in the main Fortnite Lobby menu and the Epic Account portal. 
• Parental Controls that include the option to require a PIN to send and accept friend requests and enable parents to authorize purchases before they are made. 
• A daily spending limit for players under the age of 13.
• Granular privacy options for chat, which include “Everybody," “Friends and Teammates,” “Friends Only,” or “Nobody.” 
• Cabined Accounts that provide a tailored experience that is safe and inclusive for younger players while they wait for parental consent.
• Settings that default to the highest privacy option for players under the age of 18, including voice and text chat defaulting to “Nobody.”

The old status quo for in-game commerce and privacy has changed, and many developer practices should be reconsidered. We share the underlying principles of fairness, transparency and privacy that the FTC enforces, and the practices referenced in the FTC’s complaints are not how Fortnite operates. We will continue to be upfront about what players can expect when making purchases, ensure cancellations and refunds are simple, and build safeguards that help keep our ecosystem safe and fun for audiences of all ages.