On December 19th, the Department of Justice (DOJ), on behalf of the Federal Trade Commission (FTC), sued a video game developer for breaching the Children’s Online Privacy Protection Act (COPPA) by inadequately safeguarding children’s privacy.
FTC Allegations About Dark Patterns
In a separate complaint, the FTC also alleged that the company deceived consumers by using “dark patterns” to get people to make unintended in-game purchases and incur unwanted costs without parental intervention. (See also FTC press release here.)
A complaint was filed in the U.S. District Court for the Eastern District of North Carolina, alleging that the company had illegally collected personal information from players under 13 without notifying their parents or gaining parental permission.
Depending on their request, the FTC argued that parents had to go through excessive steps to have their children’s personal information erased and the company allegedly failed to comply with these requests.
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Violating the FTC Act’s
The company has been accused of acting unfairly under the FTC Act since its default settings enabled real-time voice and text chat communications for minors.
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According to the FTC, these default settings, as well as a system that allowed children and young adults to connect with strangers while playing the game, put them at risk of facing threats, receiving harassment, and suffering from psychological distress.
Company’s Resistance
Even though employees within the company and players expressed their concerns, the FTC reported that the firm was unwilling to switch off the default setting and made it hard for players to figure out how to turn voice chat off when they eventually took action.
Prohibited From Enabling Voice and Text Communications
The Department of Justice’s proposed court order would prevent the company from allowing a voice or text communications except when a parent of a player under 13, or a teenage user (or their parents) gives permission through a privacy setting.
The company must delete any information that was obtained without meeting COPPA’s parental notice and consent guidelines, unless they receive authorization to keep the data or if players claim they are 13 years of age or older with a neutral age gate.
On top of that, the company should set up a detailed privacy program to handle the detected violations and maintain default privacy settings, along with obtaining periodic independent audits.
$275 Million Civil Penalties
In accordance with the DOJ’s announcement, the organization has consented to pay $275 million in fines—the highest sum ever for a COPPA infringement.
In relation to the accusations of using illegal dark pattern strategies, the FTC asserted that the company utilized a range of dark patterns, such as “illogical, conflicting and perplexing button arrangements,” to convince people of all ages to make unintended in-game purchases.
According to the FTC, these tactics led people to spend hundreds of millions of dollars in unapproved charges and were also used to charge consumers without their authorization.
Players could buy in-game stuff with the simple press of a button, without needing permission from parents or cardholders.
In addition, the firm supposedly restricted access to items that were bought if players contested unauthorized charges with their credit card issuers and threatened those who challenged any potential fees with a permanent ban.
Furthermore, according to the FTC, the cancellation and refund features were deliberately hidden.
The administrative order proposed to address the unlawful billing practices would require the company to reimburse affected players $245 million.
The company won’t be able to charge players using deceptive tactics or without obtaining their agreement. Also, the order prohibits them from blocking players from accessing their accounts if they dispute any unauthorized charges.
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