ACM fines Epic Games after ruling Fortnite encouraged children to buy

Netherlands

The Netherlands Authority for Consumers & Markets (ACM) fined Epic Games International S.à.r.l. EUR 1.125 million for unfair commercial practices aimed at children. With the online game Fortnite, the ACM found that Epic used deceptive and aggressive tactics to induce children to make in-game purchases, violating the Dutch Unfair Commercial Practices Act. 

Fortnite

Fortnite is a last-man-standing online game in which players control a character. The game is free to download and play, but paid purchases can be made in the Fortnite ‘Item Shop’, the game’s digital store in which items are offered for sale. This offer featured 24-hour countdown timers.

Countdown timers

This is not the first time that the ACM has acted against online businesses using misleading countdown timers to create a sense of urgency among consumers. In 2019, the ACM confronted several online stores that falsely claimed products were only available for a limited time, and ordered them to stop this practice or face fines. The ACM considers countdown timers to be misleading if they do not reflect the actual availability period of the products, and to be aggressive if they pressure consumers into making immediate purchase decisions.

Violations

In the investigation, the ACM assessed Fortnite Item Shop (i.e. Epic's commercial practices) from the perspective of children, who it views as a vulnerable consumer group. The average consumer playing Fortnite is considered to be a child (18 years and younger), and children are deemed more vulnerable to certain commercial practices due to their age and the game environment. 

In the case of Epic, the ACM identified three violations of the Dutch Unfair Commercial Practices Act, which prohibits misleading and aggressive commercial practices that harm consumer interests. The violations include: 
 

  • Deceptive scarcity indicators: Epic used 24-hour countdown timers in the Fortnite Item Shop that inaccurately indicated the availability period of "Third-Party Item Sets" (TP item sets), misleading children into believing they had limited time to make purchases. The timers suggested TP item sets were available for only 24 hours, but in reality they were available for longer, on average 15 days. This practice was found to encourage immediate purchase decisions and exploit children's fear of missing out (FOMO).
  • Direct exhortation of children to make purchases: Epic directly exhorted children to purchase advertised products or persuade adults to purchase them through promotional videos for the Battle Pass upgrade, the Claim Rewards screen, and the Message of the Day (MOTD). These advertisements contained imperative language such as "Buy battle pass," "I want the battle pass," and "Get it now," which is considered aggressive.
  • Complex offer under time pressure: Epic presented a complex and unclear product offer in the 'Daily' and 'Featured' categories of the Item Shop under time pressure, exploiting behavioural pitfalls of children. The offer was made more complex with the use of coloured frames and labels indicating rarity without providing clarity on the actual scarcity of items. The 24-hour countdown timers added to the pressure, limiting the time children had to make informed purchase decisions.

Sanctions

The ACM based its legal grounds for the sanctions on the Dutch Civil Code (Sections 6:193a to 6:193j inclusive) concerning unfair commercial practices. 

The ACM found that Epic violated the following rules of the Dutch Civil Code: 

  • Traders are prohibited to mislead consumers by providing false or deceptive information about the availability or scarcity of products.
  • Traders are prohibited from using aggressive commercial practices that directly exhort children to buy products or persuade parents or other adults to buy them for their children.
  • Traders must act in accordance with the requirements of professional diligence and not to impair the consumer's ability to make an informed decision.

The sanctions ordered by the ACM consisted of two separate fines of EUR 562,500 each for the first two violations, and a binding instruction for the third violation. The binding instruction concerns the third violation, requiring Epic to align its digital offer in the Item Shop with the Dutch Civil Code by 10 June 2024. Epic must implement changes to provide clarity on the availability period of items and offer children more time to make informed decisions. Epic is required to inform the ACM about the changes made within three days after the deadline. The binding instruction is valid for a period of two years.

Epic reaction

Epic stated in a press release that the company disagrees with the ACM's decision and will appeal. Epic said the ordered changes would create a ‘poor user experience’. While the company’s appeal is pending, Epic already made changes for Dutch gamers. Starting May 2024, children under 18 years will not be “able to see or purchase items that are in the shop for less than 48 hours”. Furthermore, Epic has already implemented several changes to the Fortnite Item Shop such as the removal of countdown timers and the introduction of an ‘undo purchase button’.

Conclusion

The ACM’s decision signals that it considers the protection of underage online consumers extremely important and that it is alert to the use of misleading countdown timers.

For more information on the ACM’s decision and the online gaming industry in the Netherlands, contact your CMS client partner or these local CMS experts: