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The FTC Came Gunning for Fortnite. Is the Metaverse Next?

The FTC Came Gunning for Fortnite. Is the Metaverse Next?

The FTC’s decision to fine Fortnite developer Epic Games a record $520 million for allegedly lax privacy settings that allegedly put minors at risk raises a crucial question for the Metaverse: Will their virtual worlds be like this? The Web3 world is paying attention, although Fortnite is not based on a blockchain. The blockbuster title has more than a little in common with its play-to-win cryptocurrency peers:

  • Online payments (albeit via fiat).
  • Chat forums.
  • The ability to create almost entirely custom avatars.

Not to mention a specific game mode where players set up their island, which they use as a base to visit their friends’ virtual homes.

Sound familiar? 

Reps from Epic Games even alluded to “virtual currencies” in a lengthy statement about the deal, the largest of its kind yet, saying, “Games need to go way beyond that to ensure players have an even clearer understanding of when.” they’re trading a “buy” in both fiat and cryptocurrency. In the past, the FTC has singled out well-known names like Fortnite to set an example by issuing a “huge fine and using that as a signal to the industry,” According to Dan Jasnow, an attorney with the law firm ArentFox Schiff, who is focused on the Metaverse and related intellectual property matters, as “the entire Metaverse, blockchain and crypto industry will come under scrutiny following the FTX fallout.”, Jasnow told Blockworks “Everyone should take this as a warning that the FTC is scrutinizing consumer protection issues across the board” cough.

The FTC alleges that Epic illegally collected identifiable information from users under 13 and used design tricks or “dark patterns” to charge customers without their consent. Fortnite reportedly routinely saved its players’ payment information after an initial purchase. Since the regulator began investigating the matter, the game’s developers have rolled out a new payment order flow that includes simplified refunds. Regarding the accidental transmission of personal conversations, Epic changed its default privacy settings in September to enforce higher standards for minors.

According to Epic, game developers need to create a title to get to this point. Rapid innovation, high player expectations, and a priority on fresh concepts characterize the video game industry. Bylaws written decades ago do not define how gaming ecosystems should function. The laws have stayed the same, but their application has evolved, and more than traditional industry practices is needed.

One must remember that the user base of various Metaversum platforms like The Sandbox and Decentraland is still relatively small compared to Fornite’s 400 million users worldwide (estimated by the FTC). Earlier this year, Epic Games raised $2 billion from existing investors, including Sony’s investment arm and KIRKBI, the family-run investment firm behind The LEGO Group, to accelerate its Metaverse ambitions. Block Party in your play market.

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