December 23, 2022 – Suit Claiming Fortnite Manipulates Minors into Buying Things Dismissed
The proposed class action detailed on this page was dismissed with prejudice by U.S. District Judge Charles R. Breyer on May 2, 2022.
In a one-page order, Judge Breyer granted the defendant’s unopposed motion to dismiss on the grounds that the plaintiffs participated in a nationwide class settlement with Epic Games reached in North Carolina state court in January 2021. That settlement has been finalized, all appeals have been resolved, and payment has been distributed to eligible claimants.
Judge Breyer stated the parties in the suit detailed on this page agreed that the 2021 Epic Games settlement “releases the claims Plaintiffs raised in this case.”
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A proposed class action alleges Fortnite-maker Epic Games “misleads and manipulates” minors into paying ever-increasing amounts of real money for “virtual things.”
The 23-page case out of California claims Epic Games, who’s currently locked in a courtroom duel with Apple over App Store fees, has entered into what amounts to millions of contracts with minors, who pay real-world money to buy video game currency, items and other content, without sharing fully the real cost of what they’re spending—or the fact that they’re entitled under state law to ask for a refund.
“Epic Games makes it all but impossible for minors to determine the real cost of the virtual items they buy, fails to provide them with information about their purchasing history, pressures them to buy more and more virtual things, and cuts their parents out of their purchasing decisions,” the lawsuit scathes. “At the end, Epic Games misleads them about their right to undo their contracts and obtain a refund.”
According to the complaint, many of the contracts Epic Games has entered into with minors are subject to disaffirmance, or when one party has the right to renounce a contract, and are voidable as a result. Other contracts between the defendant and minors, the case says, were void at their inception.
Although the smash hit game Fortnite is free to play, in-game content can be bought with virtual currency, called V-Bucks, to enhance gameplay. Real-world money is used to buy V-Bucks, which has made Fortnite “spectacularly profitable” for Epic Games, the suit says.
A huge number of Fortnite players are children, however, and the lawsuit alleges the game, which has become a hub of sorts for minor players to interact virtually, is designed to draw younger players into the game and keep them there. Epic Games, the case says, is aware of the massive number of minors who play Fortnite, as well as the fact that, per the suit, “minors are particularly susceptible to becoming hooked on the game.”
As such, Epic Games has designed Fortnite “to encourage continuous play and, thereby, to encourage minors to continuously make in-game purchases,” the lawsuit says.
The complaint alleges Epic Games uses the manner in which it regulates in-game purchases—that is, with nonrefundable V-Bucks—to mislead Fortnite players, especially minors. Highlighted in the lawsuit is the “complicated means” by which Epic Games converts real dollars to V-Bucks and then prices items and game content only in V-Bucks. The case alleges Epic Games has caused players to be unable to determine the real cost of an in-game purchase without first determining the conversion rate at which they bought the V-Bucks, which will differ depending on how many V-Bucks were purchased and the time they were bought, and then multiplying the cost of an item in V-Bucks by that conversion rate.
“As a pair of economic scholars has observed, it is ‘clear that Fortnite has picked the right conversion rates to create a high degree of “money illusion,’” so that a player’s ability to determine the cost of a purchase is ‘reduced to a large extent,’” the lawsuit says. “This is especially true for minors.”
With regard to how easy it is to buy V-Bucks within Fortnite, the case expands that Epic Games “knows that minors lack the impulse control and judgment of adults,” not to mention an understanding of the economic reality of making in-game transactions, and has designed the V-Bucks system to induce young people to make substantial purchases of V-Bucks without parental oversight.
Under California law and the statutes of “most, if not all,” other states, minors are allowed to avoid contracts into which they’ve entered, the lawsuit says, arguing that minors, contrary to Epic Games’ policy, can request a refund free from conditions. The suit claims Epic Games’ stated refund policy and its application to minor Fortnite players is misleading in that it “communicates that in-game purchases are categorically nonrefundable (or effectively nonrefundable) and fails to disclose that minors are permitted to obtain refunds upon disaffirmance.”
“Under California law, a minor may not enter into a contract relating to any personal property not in the immediate possession or control of the minor,” the complaint reads. “Such contracts are void and, as such, amounts paid pursuant to those contracts are refundable.”
The case looks to represent all minors in the United States who, at any time between July 27, 2017 and the present, had a Fortnite account that they used to play the game on any device and in any mode and (a) exchanged in-game V-Bucks for any item or game content, or (b) made a purchase of V-Bucks, items, or game content for use within Fortnite.
Similarly, the suit also looks to cover a class of parents in California who, at any time since July 27, 2017, were the parent or guardian of a minor who, while residing in the state, had a Fortnite account used to play the game on any device and in any mode and who, using the funds supplied in any form by the parent or guardian, (a) exchanged V-Bucks for any item or game content, or (b) made a purchase of V-Bucks, items, or game content for use within Fortnite.
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