Earlier this year, Epic Games received a fine of €1,125,000 from the Netherlands Authority for Consumer and Markets for engaging in “unfair commercial practices” targeting Fortnite players under 18.
An investigation by the ACM revealed that Epic Games exploited children’s vulnerabilities through design choices in its item shop, utilizing phrases like “get it now” and “buy now” in advertisements, which were deemed as illegally aggressive. Countdown timers on ads for available items were also used, further exploiting children’s fear of missing out, resulting in fines totaling €1,125,000.
To understand how developers can avoid similar situations and where the line between clever promotion and exploitation of young audiences is drawn, we consulted with FUTURA Digital, a company providing legal and strategic assistance to digital companies, specializing in navigating the legal aspects of the digital world.
What can developers do to avoid a similar fate? And when does clever, timely promotion cross the line into unfair and illegal exploitation of a young audience?
Reacting to the ACM’s decision
The ACM in the Netherlands issued fines against Epic Games for pressuring children into making in-game purchases through aggressive commercial practices. Epic Games has appealed, stating that it has taken measures to protect children, such as restricting purchases for players under 16, implementing parental controls, and setting spending limits for younger players. However, these actions were considered insufficient to demonstrate the company’s commitment to dealing responsibly with underage players.
A Legal Perspective
The fine imposed on Epic Games could have significant implications for the gaming industry, spearheading a shift towards stricter regulations and ethical responsibilities for companies interacting with young audiences. This could lead to the development of new industry standards focused on creating a safer environment for children and increase pressure on gaming companies to comply with these regulations.
Companies must find a balance between regulatory risks and business interests.
Notable Cases in the Gaming Industry
While Epic Games’ case in the Netherlands sets a precedent, other companies have also faced fines and scrutiny for their practices concerning children:
- TikTok: In 2019, TikTok was fined $5.7 million by the FTC for violating the Children’s Online Privacy Protection Act (COPPA).
- Apple and Google: Both companies have faced fines for misleading advertising and lack of transparency in subscription services.
- EA: Electronic Arts was fined €10 million for loot boxes in its FIFA game series.
- Sony and Microsoft: These companies have faced fines related to in-game purchases and their impact on minors.
- Disney-owned Playdom: The company was fined $3 million for illegally collecting personal information from children without parental consent.
