Corporate Greed Case Study: Epic Games & Its Impact on Children

TL;DR: Epic Games, the creator of the global phenomenon Fortnite, was ordered to pay a staggering $275 million civil penalty for violating child privacy laws and deploying design choices that inflicted substantial harm on children and teens. Epic Games illegally collected personal information from children under 13 without their parents’ consent. It also enabled by default voice and text chat features that exposed young players to harassment, threats, and psychologically traumatizing content. Internal records show Epic Games’ own employees flagged these dangers and pleaded for basic safety measures, only to be ignored by a leadership that prioritized engagement and profit over the well-being of its youngest users.

This investigation untangles the legally documented facts of the case, revealing a story that is not merely about one company’s missteps, but about a system that treats child safety as a barrier to profit and regulatory fines as a simple cost of doing business.

The details that follow are sourced directly from the legal filings that brought one of the world’s biggest gaming companies to account.

Table of Contents

1. Introduction: A Fortress of Harm Built on Profit
2. Inside the Allegations: A Deliberate System of Exploitation
3. Regulatory Failure: How Capitalism Exploits Delay
4. Profit-Maximization at All Costs: The Billion-Dollar Incentive
5. The Economic Fallout: A Fine or a Fee?
6. A Public Health Crisis by Design
7. Conclusion: Not a Failure, But a Feature
8. Was the Lawsuit Frivolous or Serious?

1. Introduction: A Fortress of Harm Built on Profit

Millions of little children have found a digital playground in the the cel-shaded, cartoony world of Fortnite. Behind the screen, however, a much darker reality was constructed. Epic Games, the developer of the blockbuster title, cultivated an environment where children were systematically exposed to danger, their privacy was violated, and their psychological well-being was treated as collateral damage in the pursuit of unrestrained growth.

The U.S. government’s legal complaint against Epic Games paints a damning picture of corporate negligence. The company’s business model involved matching children and teens with adult strangers from around the globe.

It then armed those interactions with live, always-on voice and text chat, creating a perfect storm for abuse. Children were bullied, threatened, and sexually harassed.

They were exposed to traumatizing content, including discussions of suicide and self-harm, all within a game marketed as a safe and fun experience.

he financial penalty for this conduct was historic: a $275 million judgment.

2. Inside the Allegations: A Deliberate System of Exploitation

The government’s case against Epic Games was built on a foundation of the company’s own internal records and documented practices. These allegations reveal a pattern of behavior that was not accidental, but intentional and sustained over several years. Epic’s actions constituted a severe violation of the Children’s Online Privacy Protection Act (COPPA), a federal law designed to protect young people online.

From its launch in July 2017 until at least September 2019, Epic took no meaningful steps to comply with COPPA. The company failed to provide parents with direct notice about what personal information it collected from their children. It also failed to obtain verifiable parental consent before harvesting that data. Instead, its privacy policy simply disavowed that its services were directed at children, a claim directly contradicted by its own marketing and product development.

The most disturbing allegations center on the game’s default communication settings. Voice and text chat were turned on by default for all players, regardless of age.

This meant a child loading into a game for the first time was immediately thrown into live, unfiltered conversations with anonymous adult players. Internal emails reveal that Epic’s leadership was aware of the risks. In August 2017, just after the game’s launch, Epic’s Director of User Experience (UX) emailed leadership pleading for “basic toxicity prevention” and urged the company to “avoid voice chat or have it opt-in at the very least.” The request was ignored.

Eight months later, the UX team presented comprehensive research to executives, again recommending opt-in voice chat.

The team noted that most players did not use the feature with strangers and that it presented “a risk in terms of negative social behavior.” Their research highlighted media reports warning about predators in Fortnite. Still, the UX team “got no traction.” One employee lamented in an email, “our voice and chat controls are total crap as far as kids and parents go.”

The consequences were predictable and horrific. Parents and players submitted thousands of support tickets to Epic detailing instances of bullying, threats, and sexual harassment. The company’s own records logged 834 support cases containing the phrase “kill myself” and 485 containing the word “suicide” in a single year.

One parent wrote to Epic in distress after their nine-year-old son’s online “friend” told him he was going to kill himself that night, an event that “shook him to the core.”

Even when Epic gained actual knowledge that specific users were children, it failed to act. In March 2018, Microsoft informed Epic that it needed to block Xbox accounts belonging to children under 13 from cross-console play. This provided Epic with a direct list of child users. Epic complied with the narrow request but deliberately chose not to apply full COPPA protections to these known child accounts, pretending it had no knowledge of their age for any other purpose.

When parents attempted to exercise their legal right to delete their child’s data, Epic created a bureaucratic nightmare.

Epic Games required parents to provide an exhaustive list of information that was nearly impossible to obtain, including all IP addresses the child had used, the account creation date, invoice IDs for purchases, and the last four digits of the first payment card ever used. These obstructionist tactics served to keep child accounts active and their data within Epic’s ecosystem.

Timeline of Documented Misconduct

3. Regulatory Failure: How Capitalism Exploits Delay

The Epic Games case is a textbook example of how corporate malfeasance thrives in the shadow of slow-moving regulation. For over two years, Epic operated in blatant violation of the Children’s Online Privacy Protection Act, a law that had been on the books for two decades. This significant delay between violation and enforcement is a feature, not a bug, of a system that favors corporate agility over public protection.

Under a neoliberal framework, regulatory bodies are often underfunded and understaffed, forced to play a perpetual game of catch-up with trillion-dollar industries. Corporations like Epic can launch products, scale to hundreds of millions of users, and extract billions in profit long before the first government investigator opens a file. The incentive structure of capitalism rewards this “act first, ask for forgiveness later” approach. The profits reaped during the years of non-compliance can easily dwarf any eventual financial penalty.

The system relies heavily on self-regulation and good-faith compliance, assumptions that crumble in the face of a profit-maximization imperative.

Epic was aware of its obligations; it simply chose to ignore them. The company treated legal compliance not as a moral baseline, but as a business calculation where the risk of a future fine was weighed against the certainty of immediate revenue. This strategic use of time and regulatory lag allowed harm to become entrenched and normalized before any accountability was brought to bear.

4. Profit-Maximization at All Costs: The Billion-Dollar Incentive

Every decision documented in the government’s complaint against Epic Games points to a singular, overriding objective: profit. The choice to keep voice chat on by default was not a technical oversight; it was a design decision intended to boost player engagement and retention. A more active and talkative player base translates into more hours played and, ultimately, more in-game purchases.

During the period of its alleged violations, Epic earned billions of dollars from Fortnite. A significant portion of this revenue came directly from its youngest players.

The company’s business model relied on selling digital items like character skins and dance moves, which were heavily marketed to children. Furthermore, Epic launched a massive consumer products program, partnering with companies like Hasbro and Spirit Halloween to sell official Fortnite-branded toys, costumes, and back-to-school merchandise.

These licensing deals generated over $130 million in royalties for Epic.

The company and its agents specifically targeted “Kids” and “Youth Universes,” acknowledging that “Youth and Kids are obsessed with Fortnite.” It approved child-sized costumes, marketed Nerf guns to “6-11 year old boys,” and ran television commercials for its toys on Nickelodeon and the Cartoon Network. The evidence shows a direct line connecting the exploitation of children within the game to the monetization of their fandom outside of it.

The decision to ignore internal warnings about player safety was a calculated choice to protect a business model that was immensely profitable because of its appeal to children.

5. The Economic Fallout: A Fine or a Fee?

The $275 million civil penalty levied against Epic Games is one of the largest in the history of the Federal Trade Commission. While the figure is substantial, its true impact must be measured against the financial reality of modern corporate power. For a company that generated billions of dollars in revenue during the years it violated the law, such a penalty can be viewed less as a punishment and more as a retroactive licensing fee for misconduct.

This is a fundamental flaw in the corporate accountability framework under late-stage capitalism. Fines are often structured as a cost of doing business rather than a deterrent.

If a company can earn $5 billion through illegal practices and later pay a $275 million fine, the behavior was, from a purely financial standpoint, a resounding success. This creates a moral hazard where corporations are incentivized to break the law, knowing that the profits will almost certainly outweigh the penalties.

The stipulated order in this case did not require any Epic Games executives to be held personally liable. The penalty was paid by the corporation, a vast and impersonal entity.

This insulates the decision-makers from the consequences of their actions, reinforcing the idea that corporate harm is a systemic issue with no single individual to blame. As long as penalties are treated as a balance-sheet item and executives face no personal risk, the cycle of profit-driven harm will continue.

6. A Public Health Crisis by Design

The harms detailed in the case against Epic Games represent a significant public health crisis affecting millions of children and teens.

The exposure of minors to bullying, sexual harassment, and psychologically traumatizing content has well-documented, long-term effects on mental and emotional development. Epic’s on-by-default communication settings actively engineered it at a massive scale.

By creating an environment where children were involuntarily connected with unvetted strangers, Epic facilitated conditions that can lead to anxiety, depression, and trauma. The internal reports of players discussing suicide and self-harm are a chilling indicator of the platform’s impact on vulnerable users. These are not edge cases; they are the predictable outcomes of a system that prioritizes user engagement metrics over human safety.

In a responsible system, a product with these known side effects would be subject to rigorous public health oversight, similar to pharmaceuticals or physical toys.

Under the current deregulated digital landscape, however, companies like Epic are allowed to operate as their own arbiters of safety, with disastrous results. The psychological toll on a generation of young players is a debt that cannot be repaid by a monetary fine. It is a lasting consequence of a business model that treated the mental health of children as an externality.

7. Conclusion: Not a Failure, But a Feature

The case of the United States vs. Epic Games is a distressing illustration of the predictable consequences of a neoliberal capitalist system that structurally prioritizes profit above all else. The violations were not an aberration; they were the logical outcome of an economic model that rewards growth at any human cost.

From the deliberate decision to ignore employee warnings to the strategic foot-dragging on regulatory compliance, Epic’s actions were rational choices within a system that incentivizes such behavior. The legal and financial penalties, while significant, arrived only after years of harm had been inflicted and billions in profits had been secured. This case demonstrates that the system did not fail; it worked exactly as it was designed to.

The true victims are the children and parents who trusted that a game presented as a vibrant playground was a safe place. That trust was betrayed. Until there is a fundamental shift in how society regulates corporate power and holds executives personally accountable for the harm they cause, stories like this will be repeated, with different company names but the same tragic outcomes.

8. Was the Lawsuit Frivolous or Serious?

The lawsuit against Epic Games was unequivocally serious and necessary. It was substantiated by the company’s own internal communications, extensive documentation of its business practices, and a clear, multi-year pattern of violating federal law. The government’s complaint presented a powerful and detailed case of a corporation that knowingly put millions of children in harm’s way for financial gain.

The legitimacy of the lawsuit is further cemented by its outcome: a $275 million judgment and a court order mandating sweeping, systemic changes to Epic’s operations for the next two decades. Such remedies are reserved for the most severe cases of corporate misconduct. This was a critical intervention to halt ongoing harm and establish a precedent for accountability in the digital age. The case stands as a landmark effort to affirm that the safety of children is not a negotiable term in the pursuit of profit.

The FTC has a press release about this scandal: https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-finalizes-order-requiring-fortnite-maker-epic-games-pay-245-million-tricking-users-making