$245 million FTC settlement alleges Fortnite owner Epic Games used digital dark patterns to charge players for unwanted in

The FTC’s $275 million proposed settlement with Epic Games, owner of Fortnite, alleges the company violated the law by collecting personal information from kids under 13 without parental consent and by enabling voice and text chat by default – an unfair practice that put kids and teens in risky contact with strangers. But to borrow a phrase from advertisers, “But wait! There’s more!” Much, much more in the form of a separate $245 million proposed settlement with Epic Games for using digital dark patterns to bill Fortnite players for unintentional in-game purchases.

How much money can a company take in by selling virtual costumes, dance moves, and piñatas shaped like llamas? It won’t surprise Fortnite fans to hear that the answer is billions, especially when, as the FTC alleges, Epic used a host of digital design tricks – dark patterns – to charge consumers for virtual merchandise without their express informed consent. What’s more, the FTC says when people disputed unauthorized charges with their credit card company, Epic locked their accounts, depriving them of access to content they had already paid for. The proposed FTC consent order is the agency’s largest administrative settlement to date. Continue reading for some insightful – and instructive – quotes from consumers and employees who didn’t hold back about their opinions of Epic’s tactics.

For the technological Rip Van Winkles among us, Fortnite is a hit video game with more than 400 million registered users, many of whom are kids. Although people can play the basic version for free, Epic charges for in-game purchases designed to enhance game play. The FTC alleges that with millions of consumers’ credit cards conveniently in hand, Epic failed to adequately explain its billing practices to customers and designed its interface in ways that led to unauthorized charges. You’ll want to read the complaint for details, but here are a few of the dark patterns the company allegedly used.

According to the complaint, Epic set up its payment system so that it saved by default the credit card that was associated with the account. That meant that kids could buy V-Bucks – the virtual currency necessary to make in-game purchases – with the simple press of a button. No separate cardholder consent was required. And although the currency was imaginary, the charges Epic packed on to Mom or Dad’s credit card were very real. What did parents and users have to say about Epic’s methods? Here are some examples:

Epic’s own Fraud and Risk Consultant expressed similar concerns internally and recommended that the company require account holders to confirm their CVV numbers before charging the card on file: “This is standard / best practice and it prevents kids from using mom’s credit card without her permission[.]” However, by the time Epic finally took that advice, the company had already billed account holders for millions of V-Bucks transactions – many of which were unauthorized, according to the FTC.

Another dark pattern alleged in the FTC’s lawsuit is Epic’s design of in-game purchases in a way that made it easy for an inadvertent button push to lead to unwanted charges. For example, for users playing Fortnite on the small screen of a smartphone, the company placed the button to preview merchandise very close to the purchase button. The upshot: One misaligned click by a user still in the window shopping phase and Epic immediately deducted the cost of the item from the player’s V-Bucks balance. Users also reported unwanted purchases when the game was waking from sleep mode or in a loading screen.

What’s more, the FTC says Epic used inconsistent and often counterintuitive designations for the buttons, an alleged digital dark pattern that also led to unauthorized charges. For example, when playing Fortnite using the PlayStation controller, the button to preview merchandise has a cross on it while the button to buy certain items has a square. But for other items, those functions are reversed. Users who press the square can preview items, but users who press the cross are charged.

Epic was undoubtedly aware of the consequences of its design choices, given what users were reporting to the company:

All told, the company received more than a million complaints about unwanted charges. And it wasn’t just customers. Epic’s own employees raised concerns about unwanted charges and repeatedly recommended measures to address them. For example, one employee described the company’s failure to include a confirmation screen for sales as “a bit of a dark UX [user experience] pattern.” But among Epic’s reasons for rejecting that suggestion was a concern it would reduce the number of “impulse purchases.”

In addition, the FTC alleges that Epic set up roadblocks that hindered users’ ability to reverse unauthorized charges. For certain purchases, Epic imposed a flat “no refunds” policy. For other inadvertent buys, the FTC says Epic “deliberately requires consumers to find and navigate a difficult and lengthy path to request a refund through the Fortnite app,” hiding the button in a hard-to-find location under the “Settings” tab.

What if users went to their credit card companies to dispute unauthorized charges? According to the complaint, Epic locked them out of their Fortnite accounts, denying them access to the merchandise they bought that wasn’t the subject of the credit card dispute.

To settle the case, Epic has agreed to pay $245 million, which will be used to provide refunds for consumers. In addition, the proposed order mandates an overhaul of the company’s billing and dispute practices and bars the use of dark patterns to get consumers’ consent. Once the proposed settlement is published in the Federal Register, the FTC will accept public comments for 30 days.

The message for other companies should be clear. Take steps to avoid the dark patterns alleged in the Fortnite complaint and others outlined in the FTC report, Bringing Dark Patterns to Light.

Look at your website or app through the eyes of consumers. UX – user experience – is the current term, but it harkens back to a consumer protection fundamental: Be transparent about your billing practices. Consumers who check their accounts or view their credit card statements should never be taken by surprise.

Exercise particular care where kids are concerned. When it comes to box fighting or bunny hopping, kids may be skilled Fortnite players. But it’s a mistake to presume they have a similar sophistication about how in-game purchases work.

Rethink your refund practices. According to the complaint, an Epic employee who helped design the refund request path reported that during testing, he put the link in an obscure location in an “attempt to obfuscate the existence of the feature” and that “not a single player found this option in the most recent round of UX testing.” When the designer asked if he should make the feature easier to find, he was told by a superior, “it is perfect where it is at.” The moral of the story: Hiding the method customers must use to ask for a refund isn’t a good look for a company, and it’s not a strategy your business should implement.

Read your mail and listen to your employees. In many of those one million complaints Epic received, users gave the company an earful about exactly how its billing practices let them down – and Epic’s own employees echoed the same concerns. Companies that want to foster goodwill and avoid legal hot water should listen more carefully to customers and staffers.

Are you a Fortnite customer with a refund question? Bookmark the FTC’s Fortnite page and sign up for email updates. You’ll be contacted when more information is available.

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