The U.S. Federal Trade Commission fined Fortnite maker Epic Games more than half a billion dollars last year.Neilson Barnard/Getty Images
Vass Bednar is the founder of the Regs to Riches newsletter, a senior fellow at the Centre for International Governance Innovation, and the executive director of McMaster University’s master of public policy in digital society program.
Last year, the U.S. Federal Trade Commission fined Fortnite maker Epic Games Inc. more than half a billion dollars for privacy violations and unwanted charges. Epic will pay a US$275-million penalty for violating children’s privacy law, change its default privacy settings and refund US$245-million for “tricking” users into making unintentional purchases.
The ruling exemplifies the intersectionality of consumer protection, privacy and competition concerns that Canadian legislation fails to sufficiently capture. The missteps of Epic Games in the United States should prompt Canadian decision-makers to step up and consider how we might be able to better use what we have in our legislative toolbox so we can play a better policy game. As U.S. President Joe Biden said in his February State of the Union speech, “We must finally hold social-media companies accountable for experimenting on our children for profits.”
We are in a unique moment as the country concurrently considers legislative interventions that can be complementary. The federal government is actively consulting on the future of competition policy while revisiting updates to federal private-sector privacy law and seeking to level the playing field between digital giants and content creators and news-media outlets.
Despite these efforts, a troublesome reality persists: The digital economy simply lacks sufficient consumer protection provisions. Canada used to have a minister of consumer and corporate affairs, but that role was merged into the Ministry of Industry (now Innovation, Science and Economic Development Canada) in 1995. In the absence of such a dedicated lens, the burden on individuals to read the fine print and navigate often exploitative arrangements is astronomical – if not comical. Given the deceit the typical internet user must contend with, it’s worth asking why we seem comfortable to let minors in Canada frolic freely in gaming worlds that embed minefields full of crafty ruses designed to have kids click and spend their parents’ money – let alone put up with it ourselves on a daily basis.
Far too many mobile apps and games use manipulative tactics – often referred to as “dark patterns” – to keep kids online longer and extract data about them. Dark patterns don’t exist in a regulatory grey zone in Canada; in theory, we enforce against them through civil and criminal provisions in the Competition Act that seek to address deceptive advertising. But in practice, the successful application of these provisions is far less clear. A more co-ordinated approach through support from the provinces’ consumer protection authorities could improve awareness and identification of these tricks.
As was recently pointed out by social psychologist Jonathan Haidt, “We have more than a hundred years of making things safe for children [in the physical world]. … Life went onto phone-based apps 10 years ago, and the protections we have for children are zero.” It’s no secret that children need better protections online. Achieving this won’t come through efforts to combat online harms alone. It may be hard for policy people to take a more holistic, transversal approach because it defies the bureaucratic scaffolding we have spent time building and buttressing. Yet it also seems clear that many pressing policy opportunities simply do not lend themselves cleanly to a single ministry.
When looked at through a Canadian lens, the Epic Games ruling exemplifies that the legislative distinctions between privacy, competition and consumer protection – particularly regarding children – can occasionally be unproductive. In a Canadian context, no one regulatory agency alone would be likely to chase a case such as this because it is not clear where primary authority for the failing lies.
Sometimes we sink too much time into fretting over which policy player should be holding the joystick, wasting time as problems persist and fester. The FTC found that Epic Games was intentionally tricking people who loved playing Fortnite. But we’re tricking ourselves if we don’t take the opportunity to revolutionize our approach to regulating digital realities. It’s time for legislators to level up, too.