EU fitness check on consumer law of digital fairness

Are EU rules sufficient to protect consumers from dark patterns? The latest EU fitness check conclusions suggest there is more the EU needs to regulate.

Summary

The EU Commission has completed its most recent fitness check of consumer legislation to determine whether it ensures a high level of protection in the digital environment.

While the Commission was happy that the current legislation provides a “high level of protection and a baseline for regulatory certainty”, it identified a number of issues which, in their view, make the current regime insufficiently effective at tackling consumer harms. This means we can expect further European legislation and more co-ordinated enforcement in relation to dark patterns, amongst other things, perhaps including the creation of a European database of dark patterns.

Background

In June 2020 the EU issued its New Consumer Agenda, which included five key priorities, one of which was digital transformation and the impact on consumer protection. The EU Commission set out to analyse, by 2022, whether additional legislation or other action was needed, in the medium-term, in order to ensure equal fairness online and offline. The latest on the fitness check considers the progress made and current state of play.  

What are dark patterns? 

These are, broadly, a range of techniques which cross the line from legitimate commercial techniques to ones which unlawfully nudge consumers into making choices not in their best interests or which they wouldn’t otherwise have taken.

These include drip pricing (only disclosing common charges late on in a checkout process), subscription traps or roach motels (such as not making clear key conditions, for example auto renewal following a free trial), false time as an urgency claims (such as suggesting a discount will end in an hour, only for the clock to reset), hiding information and the application of social pressure and other techniques to get consumers to consent to things. The Commission reported that 97% of the most popular websites and apps used by EU consumers deployed at least one dark pattern and 40% of online retail shops contained at least one dark pattern.

What were the main problem areas?

The five most commonly reported areas of concern with dark patterns and other related issues identified in the fitness check were:

1. Addictive design gaming: This is the use of interface designs and functionalities that induce digital addiction. The Commission noted that 31% of consumers reported spending more time or money than they intended because of specific features such as the autoplay of videos, receiving rewards for continuous use or being penalised for inactivity.
2. Personalisation: This covers a wide range of concerns consumers hold regarding the use of their personal data in the digital sphere including using personal knowledge of a consumer to unfairly target them, difficulties consumers have in understanding what kind of profile has been created about them and how it would be used and insufficient control of how their data is used.
3. Social media: The Commission’s concerns in this area include the continued failure of influencers to disclose paid promotions and the promotion of scams and dangerous products.
4. Subscriptions: Concerns around digital contracts particularly relate to the rise of subscription models including difficulties consumers have in cancelling them, auto-rollovers and the transfer of free trials into paid subscriptions. There is a hope that the forthcoming requirement to provide a so called “withdrawal button” to allow EU consumers to easily withdraw during the cooling off period might go some way to address some of these concerns. 
5. Dynamic pricing of tickets: The research suggests that this can be problematic and this should be monitored to see if new requirements should be introduced to deal with these issues.

What have they found?

The Commission has determined that, while the current legislation provides the “necessary minimum of regulatory certainty and consumer trust”, it has failed to achieve its objective of providing a high level of consumer protection. The consumer detriment, they estimate, costs around 7.9 billion Euros per year, with the highest levels of detriment among younger age groups. The current failures of the consumer protection regime include:

1. The inability of the existing principles based legislation to be specific enough to deal with the problematic practices identified by the Commission
2. An increasingly complex regulatory picture as specific legislation, such as the AI Act, are adopted to deal with new technologies or types of traders
3. Regulatory fragmentation as member states step up to regulate on problem areas in the absence of EU action (such as influencer marketing)
4. Ineffective cross-border enforcement, resolution of which may require the existing EU CPC enforcement mechanism for consumer law to be reformed

What are they suggesting?

The fitness check itself is not prescriptive as to how the issues with dark patterns and related issues should be addressed but the conclusions do hint at the likely direction of travel. For example:

1. New consumer protection regulations: This could involve, for example, the introduction of a Digital Fairness Act which would require a higher "fairness by design" duty on traders when interacting with consumers online. This could entail the introduction of technical and organisational measures to incorporate consumer protection considerations at all stages of the product or service development.
2. Creating a specific subscription regime to deal with subscription traps and other subscription related dark patterns: In the UK, concerns relating to subscriptions have recently been legislated on in the form of the Digital Markets, Competition and Consumers Act 2024 to address some of these issues and this could be a template for new EU requirements.
3. New blacklisted offences or other updates to existing regulation: This could include banning "addictive" practices, such as endless scrolling and other particularly problematic practices which could be added to the list of always unfair offenses.
4. Addressing dark patterns through other EU regulation: The fitness check highlights that dark patterns tend to result in overconsumption and therefore these could also be regulated via the EU Green Deal and Circular Economy initiatives.
5. Reforming the CPC: This would aim to make cross border enforcement in relation to dark patterns easier.
6. More updates to guidelines: These were updated as part of New Deal for Consumers to include a relatively short section on dark patterns generally which is hard to apply in practice. Further updates to deal with more specific types of dark patterns could be helpful in clarifying how the existing principles are supposed to apply to specific types of dark patterns. This would aim to improve legal certainty and clarity and aid enforcement.
7. Provision of examples: This could include maintaining a database of dark patterns.

Conclusion

While there are a number of different levers the Commission may seek to pull to improve consumer protection in the digital sphere, and noting the Commission explicitly sought not to prejudice the format and content of future Commission action, we suspect the most significant is likely to be further legislation (which will add to the ever expanding list of EU digital and technology legislation) and more EU level coordinated enforcement in relation to dark patterns – most likely by the CPC.  

For more on dark patterns in the EU and UK please reach out to our experts Katrina Anderson and Sam Wigley. 

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