New EU Digital Fairness Act Targets Fake Countdowns, Hidden Fees and Subscription Traps
The EU’s Digital Fairness Act targets fake countdowns, misleading prices and subscription traps, and would ban loot boxes for minors.
Ireland’s European Commissioner Michael McGrath has presented the Digital Fairness Act (DFA), a major initiative to protect consumers from unfair commercial practices online. It aims to make sure people get a fair deal in the digital marketplace, from everyday online shopping to buying tickets for major sporting and music events.
The scale of the problem is significant. More than 80% of popular e-commerce websites and mobile apps contain manipulative marketing tactics, while unfair commercial practices online cost EU consumers an estimated €10.3 billion every year.
Commissioner Michael McGrath said:
“The principle is simple: the digital economy must work for consumers, not against them.”
What the Act would change
The DFA would ban manipulative marketing tactics, known as “dark patterns”, that pressure consumers into purchases they might not otherwise make, such as fake claims that a product is almost sold out. It would also restrict unfair practices that encourage overspending, including a ban on loot boxes in video games for minors.
Consumers would get the choice to turn off addictive features such as endless scrolling and autoplay of videos. Influencers would have to clearly disclose advertising and not exploit the trust of minors in their audience. Unfair personalised ads and prices that target minors or take advantage of vulnerabilities would also be restricted.
Pricing and tickets
The Act also targets pricing transparency, particularly for purchases made with virtual in-app currencies and where dynamic pricing is used for cultural and sports events. In virtual queues, companies would have to show the current price in real time and the highest possible price.
Subscriptions and customer service
Digital contracts and subscriptions would be easier to cancel, with an end to unwanted automatic renewals and free trials turning into subscription traps. Consumers would have the right to communicate with a human in customer service, and clear rights when using an AI agent to buy products on their behalf.
Tougher enforcement
Alongside the DFA, Commissioner McGrath presented a revision of the Consumer Protection Cooperation (CPC) Regulation. It enables national consumer protection authorities, such as Ireland’s CCPC, to work more effectively together across borders against businesses that breach EU consumer protection rules.
For the first time, the update would grant the European Commission direct powers to investigate and issue fines in large-scale cases with a major impact on consumers across the Single Market. Fines could reach up to 6% of a company’s worldwide annual turnover. It would also strengthen enforcement against companies based outside the EU, including requiring them to appoint a legal representative within the EU.