Why did Fortnite get sued? FTC controversy and $245 million refund explained

Epic Games was severely admonished by the Federal Trade Commission regarding Fortnite's in-game purchase strategies. The FTC alleges that the North Carolina-based developer broke children's privacy laws and duped players into making inadvertent purchases.

This is a major development, especially for a company so widely regarded as one of the best. The community has appreciated what Epic has done over the years, and Fortnite is one of the most well-kept games. However, the gaming behemoth has come under immense scrutiny.

Two fines were handed down: one for $275 million and another for $245 million for a record-setting $520 million. Here's everything you need to know.

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Fortnite x FTC scandal: What Epic Games did and how it affects players

The FTC released a bombshell report yesterday detailing the accusations and punishments being handed down to Epic Games:

"The Federal Trade Commission has secured agreements requiring Epic Games, Inc., creator of the popular video game Fortnite, to pay a total of $520 million in relief over allegations the company violated the Children’s Online Privacy Protection Act (COPPA) and deployed design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases."

In turn, Epic released a statement of its own, agreeing to the settlement:

"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."

It further stated:

"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."

The settlement is broken down into two parts, one for the transgressions and the other to refund the victims. Those eligible for a refund include:

• Players whose account was locked after arguing over unauthorized charges from January 2017 to September 2022.
• Players who were charged V-Bucks for in-game items they didn’t want from January 2017 to September 2022.
• A parent whose child made an unauthorized purchase on the Epic Games Store from January 2017 to November 2018.

These are fairly wide-ranging groups for people to fall in. It's also unclear how rigid the refund program is, which hasn't yet been set up.

The FTC's announcement (Image via FTC website)

Can players claim that they didn't mean to purchase certain V-Bucks or challenge packs? That hasn't yet been determined. As a result of these allegations, Epic is being forced to adopt strong privacy policies for children and teens.