February 9, 2023

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The FTC’s $520 million Fornite Fine marks a new era: design regulation

The FTC's $520 million Fornite Fine marks a new era: design regulation

Fortnite on Nintendo Switch

picture: wakiweet (stock struggle)

In a sweeping settlement announced Monday, the Federal Trade Commission Epic Games fined $520 million after the Fortnite maker was accused of a variety of unsavory business practices. The complaint touches on a range of issues from alleged violations of children’s privacy to tricking users into making unintended purchases, but there’s an overarching theme: deceptive design.

Epic agreed to make a number of changes to its interfaces as part of the settlement, such as adding friction in the purchase process to avoid accidental payments, a new instant purchase cancellation system, and disabling voice chats for minors.

“Epic used privacy-invasive default settings and deceptive interfaces that deceived Fortnite users, including teens and children,” said FTC Chair Lena Khan. statment. “Protecting the public, especially children, from invasions of online privacy and dark patterns is a top priority for the commission, and these enforcement actions demonstrate to businesses that the FTC is cracking down on these illegal practices.”

After years of debate, regulators are focusing on the manipulative powers of digital interfaces, and the government appears ready to act against them.

said John Davison, director of litigation and senior counsel at Electronic Privacy Information Center, known as EPIC (no relation to Epic Games).

Lawmakers now have a fresh look at the drawbacks of digital design. They are paying more and more attention to layout and composition on the web. An update to last year’s California Consumer Privacy Act Dark patterns are prohibited, a term referring to deceptive design. ca passed The age-appropriate design code in September, which obliges companies to prioritize the safety and well-being of children in the design of online services. A similar law in the UK with the same name came into force last year – netting a $30 million fine for TikTok—and New York State is considering a more aggressive children’s design bill. US federal regulators are also taking over: The Federal Trade Commission held a workshop on dark patterns in 2021.

“There has definitely been a shift toward design regulation,” said Justin Brockman, director of technology policy for Consumer Reports and former director of technology research for the FTC. “There is recognition that choices about platform structure are within the realm of what regulators can pursue, and there is more consideration for asking companies to consider other values ​​in product design.” (Disclosure: This reporter previously worked in Consumer Reports’ press department separate from the advocacy wing, where Brookman works.)

Design organization is complex. You can influence user behavior by making one button blue and the other red, but no one wants the government to dictate the colors on websites. However, in cases like Fortnite, the issues are more noticeable.

The FTC said Epic’s “illogical, inconsistent, and confusing button configuration” duped players out of hundreds of millions of dollars in unwanted purchases. Players can buy things by mistake when trying to wake the game from sleep mode, or by clicking on the instant buy button, located next to the preview item, for example. When over a million users complained about the problem, Epic allegedly ignored them. “Using internal testing, Epic intentionally withheld cancellation and refund features to make them more difficult to find,” the FTC said. Epic froze users’ accounts if they tried to dispute the charges with their credit card companies.

“This settlement will wake up companies, and they will take a hard look at what the FTC sees as manipulative design to make sure they don’t commit the same practices,” said EPIC’s Davison.

Perhaps the most surprising part of the settlement has to do with Fornite’s voice chat feature. Chats were turned on by default, even for kids, putting children at risk of harassment or even sexual assault. According to the Federal Trade Commission, this violates laws against unfair business practices. What sets this argument apart, however, is that it treats voice chats as intrinsically dangerous and thus subject to regulatory scrutiny.

“Saying that turning on voice chat by default is in and of itself harmful is a whole new FTC principle. I can’t think of any similar cases where they’ve said this kind of design choice is inherently harmful,” Brockman said.

This reasoning could have broader implications given other technology features and services that may have insider risks. Think of the criticism that TikTok’s algorithm is addictive, for example, or Instagram links For suicidal thoughts and eating disorders among teenage girls.

“Fortnite is, in a sense, a social media platform, so much so that it has chat features, and the FTC says companies have a greater obligation to design their systems for damages release,” Brockman said.

According to Davisson, Fortnite’s turnaround is an encouraging one, especially when you consider the dark modes in the context of privacy issues. “There is an evolving understanding and acceptance that platform and website design is a major contributing factor to extractive commercial surveillance,” said Davison. “This is something that needs to be addressed as part of a broader data protection push.”

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