The European Commission has proposed new consumer protections aimed at making online subscriptions easier to leave and limiting digital designs that push people towards choices they might not otherwise make.
The proposed Digital Fairness Act, presented in Brussels on 11 November, addresses practices ranging from misleading scarcity claims to features intended to encourage excessive use of digital services. It also covers pricing, influencer marketing and protections for children.
The Commission has adopted a proposal, not a finished law. The European Parliament and the Council of the EU, representing member states, must consider it before it can become legislation. The text may change during that process and its proposed requirements are not yet in force.
Making subscriptions easier to manage
One part of the draft addresses the transition from a free trial to a paid contract. A trader would have to remind the customer before the trial ends and obtain express agreement to continue on paid terms. If the required reminder is not sent, or the customer does not expressly agree, the customer would not be bound by the paid contract.
The proposal also sets out reminders before certain contracts renew automatically. The timing and conditions differ between longer and shorter contracts. For some contracts extended indefinitely, a consumer would be able to terminate after renewal with no more than one month’s notice.
Businesses that offer contracts through an online interface would have to provide an accessible, clearly labelled way to submit a termination request online. The trader would then acknowledge the request and say when termination takes effect. The proposed function is a way to exercise a termination right; it would not itself give every customer an unconditional right to end any contract at any time.
Where a trader offers online customer service after a contract is concluded, the proposal would also require access to a human on request when other means are not effective. The draft excludes investment services from that particular requirement.
Design, pricing and children
The Commission wants to prohibit online interfaces that are likely to deceive or manipulate consumers, or otherwise materially distort their economic behaviour. Such design practices are often called dark patterns. A false claim that a product is nearly sold out is one example of the kind of pressure the package aims to address.
The proposed treatment of potentially addictive features is different from a blanket ban. For products designed in a way that is intended or can reasonably be foreseen to encourage compulsive or excessive use, traders would have to provide accessible tools allowing consumers to disable specified features. These include automatic playback and uninterrupted consumption of content.
The list also includes certain notifications, incentives to return frequently and system behaviours that encourage continued use by simulating interpersonal relationships. The draft contains exceptions relating to services and practices addressed by the separate proposed EU Kids Act.
For products directed at children, or where traders are aware with reasonable certainty that children use them, the proposal would restrict some ways of encouraging spending. These include paid variable-reward systems, commonly known as paid loot boxes, and pay-to-win or pay-to-progress mechanisms. The provisions include qualifications for services covered by the proposed Kids Act.
The draft would also require traders to show the real-money value of purchases made with paid virtual currencies in relevant circumstances. For event tickets whose prices may rise, it proposes disclosure of the number available at the advertised price and the maximum price a customer may have to pay. Influencer marketing would have to identify its commercial purpose clearly.
Debate over enforcement
The Digital Fairness Act is part of a wider consumer package. A separate proposed revision of the Consumer Protection Cooperation Regulation would strengthen the Commission’s role in investigating major cross-border cases and allow direct penalties in qualifying cases.
The proposed act would replace the existing Unfair Commercial Practices Directive with a regulation covering business-to-consumer practices offline as well as online. Its digital provisions sit alongside existing rules on areas including platforms and data protection.
Digital rights organisation European Digital Rights has argued that leaving people to find and use an off switch may not adequately address harmful design. Industry association CCIA Europe, meanwhile, has warned that overlapping obligations and enforcement arrangements could make the rules more complex for businesses. Both positions concern a proposal whose final form remains to be decided.
