European consumer regulators launch offensive against dark patterns: closer monitoring of manipulative digital practices

Consumer protection continues to play an important role within the supervisory and enforcement policies of the Netherlands Authority for Consumers and Markets (ACM): some 70-80% of the investigations launched by ACM in the past three years are related to consumer protection. ACM also recently announced that it would be focussing in 2023 on combating deception and manipulation by online companies. It will be paying closer attention, for instance, to how online shops influence consumers’ choices by means of what is known as dark patterns or fake reviews.

At the same time as this announcement, the European Commission (Commission) published the results of a screening of online shops by the network of European consumer regulators (including the ACM). This screening demonstrated that dark patterns were used on 148 of the 399 online shops investigated: for instance, 42 websites used fake countdown timers and 54 websites directed consumers – through visual design or choice of words – to certain choices, such as more expensive products.

In this blog, we discuss what dark patterns are, the relevant regulations, the enforcement by European consumer regulators, and the stricter supervision in the future.

What are dark patterns?

There is no single definition of a ‘dark pattern’. The term has no legal definition in the Unfair Commercial Practices Directive, for instance. In its press release, the Commission describes dark patterns as manipulative practices that are known to push consumers to make certain choices that may not be in their best interests. According to the Commission, the term ‘dark pattern’ is also used to refer to “a type of malicious nudging.” ACM defines dark patterns as hidden ways of misleading consumers, or as misleading design of websites to influence consumers to do things that are not in their best interest. The Data Act proposal defines dark patterns as design techniques that push consumers in certain directions or mislead them into making decisions that have negative consequences for them.

Two characteristics of dark patterns can be distilled from the various definitions: (a) they are manipulative practices, primarily used by online shops; (b) these practices push consumers in directions that are not in their interest. According to ACM, dark patterns differ from regular unfair trading practices because they occur on digital markets and because companies on those markets have more power over consumer behaviour.

The Commission published a report into dark patterns and manipulative personalisation in 2022. The report includes a list of behaviours that constitute dark patterns according to the researchers:

Dark pattern	Practical example
Bait and switch	An online shop advertises a product, but when the consumer clicks on the advertisement, that product turns out not to be available and an alternative is offered.
False scarcity	An online shop indicates that there is a scarcity when there is not (“last 3 products”).
Fake reviews	An online shop arranges for fake reviews to be posted.
False countdown timer	An online shop shows a countdown timer on the screen with the text “only 2 minutes left before the promotion expires” while that is not the case.
Sneak into basket	An online shop automatically adds insurance to the basket when you buy a mobile phone.
Confirm shaming	Insurance is offered when you book an airline ticket and you have to click “I don't want insurance and prefer to take a financial risk”.
Fake discount	An online shop displays a product with a discount “from €20 for €10” while the product was never €20.
Price comparison prevention	A supermarket fails to state the price of an apple per kilogram, making comparisons with other supermarkets difficult.
Trick question (intentional ambiguity)	An online shop writes at a checkbox: “we may contact you by email about services and products that may interest you unless you tick this box to unsubscribe.”
Pre-selection/Default	When checking out in an online shop, the subscription checkbox is automatically selected.
Pattern confusion	A series of check boxes are displayed and the meaning of those boxes is deliberately intermingled, so that consumers unintentionally agree to something.
False hierarchy	The order of search results is changed to make certain products more attractive.
Hidden costs	An online shop shows a product for €20 in the shopping basket but a €2 delivery charge is added in the final checkout step.
Roach Motel	An online shop makes it easy to take out a premium service subscription, but makes it very difficult to get out of it.
Hidden subscription/ forced renewal	An online shop automatically renews a consumer's subscription while that was not clearly stated when the subscription was taken out.
Hidden information	An online shop's terms and conditions are difficult to find.
Forced registration	Consumers are misled into thinking that they have to create an account before they can shop at the online shop.
Concealed advertisement	An advertisement on a software download page advertises “start download”.
Forced continuity	A consumer cannot delete their account with a service despite wanting to.
Friend spam	A social media company asks consumers for access to their contacts in order to invite all those contacts to the social medium on their behalf.
Loot boxes	A video game has a loot box in which consumers can buy it, with the hope for a good product from the loot box.
Intervening currency	A game has its own currency which does not clearly state how much this currency is worth in euros.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The report furthermore notes that personalised pricing, personalised ranking and personalised ads also constitute dark patterns and may be banned in certain circumstances.

Are the identified dark patterns prohibited under current law?

A number of dark patterns identified in the report are clearly prohibited under current law, for instance because they are on the blacklist of misleading commercial practices or are prohibited under other legislation. The Prijzenwet (Prices Act), for instance, prohibits the use of fake discounts (read more about this in this blog).

The main sources of European regulation on the basis of which ACM can take action against dark patterns are:

1. the Unfair Commercial Practices Directive (2005/29/EC)

2. the Consumer Rights Directive (2011/83/EU)

3. the Unfair Terms in Consumer Contracts Directive (93/13/EEC)

The Unfair Commercial Practices Directive (UCP Directive) prohibits unfair commercial practices in a broad sense. ACM has been strictly monitoring such practices for several years: see here and here. More specifically, the directive also prohibits misleading commercial practices. Briefly stated, they consist of the provision of (incorrect) information that is likely to deceive the average consumer in some way – including by its general presentation – and to induce that consumer to take a decision on a transaction that he or she would otherwise not have taken. Misleading omissions and aggressive commercial practices are also explicitly prohibited. The UCP Directive contains a blacklist of commercial practices that are considered unfair in all circumstances (see also our earlier blog on this topic). Some of the dark patterns identified in the report can be found on that list, such as bait and switch, fake countdown timers and fake reviews.

The fact that ACM and the Commission are actually taking action against dark patterns under the UCP Directive is apparent from the following practical examples:

• On 11 March 2022, ACM took action against influencers and companies using fake likes and fake followers. According to ACM, the deliberate use of fake likes and fake followers misleads consumers about a company’s quality and popularity. This is prohibited by points 23(b) and 23(c) of the UCP blacklist (reviews).
• On 21 June 2022, the Commission, together with national regulators, forced TikTok to make changes to its platform. To protect children, the platform must clearly distinguish between commercial and non-commercial content. The Commission’s action is based on point 28 of the UCP Directive's blacklist.
• On 25 July 2022, ACM announced that Wish would put an end to stop fake discounts and price personalisation, which are prohibited under Article 6(1)(d) of the UCP Directive (misleading price comparison).

The Consumer Rights Directive defines what rights consumers may derive from sales agreements. Article 22 of this directive requires that the trader seek the consumer's express consent to any extra payment. According to the report, the preselection/default dark pattern could potentially constitute a default option that the customer has to reject, which therefore cannot be considered express consent. We note that a ban on preselection might be at odds with the notion that consumers should in fact be helped by reducing the number of choices and avoiding an information overload.

The Unfair Terms in Consumer Contracts Directive prohibits certain terms in consumer contracts. The annex to this directive contains an indicative list of terms that may be considered unfair. According to the report, the forced continuity dark pattern could fall under the prohibited automatic extension of a fixed-term contract in the absence of notice to the contrary from the consumer.

ACM advocates tightening of the rules

In our opinion, by no means all the dark patterns identified are actually prohibited. The authors of the report are also non-committal: “the legal status of specific practices by individual traders is subject to the assessment of competent courts and authorities, taking into account the circumstances of each case.” The Commission’s position is ambivalent. On the one hand, according to the Commission, the UCP Directive provides sufficient guidance and is sufficiently flexible to address dark patterns. On the other hand, the Commission also identifies gaps. It finds that the blacklist in the UCP Directive may need to be supplemented to include new dark patterns (e.g. relating to data personalisation that exploits consumer vulnerabilities).

The Commission conducted a consultation in recent months to assess whether the three aforesaid directives provide a sufficient degree of protection in the digital domain. In response, ACM is calling for stricter EU rules to protect online consumers. According to ACM, the current directives are insufficiently clear to effectively enforce dark patterns. ACM makes several proposals (selection):

1. Fair design: ACM advocates a generic duty of care for companies to create a digital environment that is “inherently fair” to consumers (i.e., without dark patterns and misleading design). The online environment may not contain design choices or techniques that might harm consumers, either financially, emotionally or in terms of lost privacy or time.

2. Personalisation: personalised commercial practices must be in the interest of consumers and may not lead to discrimination or exclusion, in particular of vulnerable groups. They may also not exploit consumer vulnerabilities – although it is unclear what is meant by this.

3. Definition of ‘average consumer’: ACM wants to soften the standard of the ‘average consumer’ (informed, prudent and observant) to better reflect the actual behaviour and capabilities of consumers. This will make it easier for practices to be classified as unfair.

4. Transparency obligations: ACM sees little merit in transparency obligations as a means of remedying information asymmetry regarding dark patterns. The effectiveness of existing transparency obligations should be evaluated. ACM calls for alternative means of protecting consumers and wishes to prohibit practices for which there are no alternative solutions.

5. Liability: according to ACM, it should be possible to hold external providers liable for products and services that create or facilitate misleading designs in e-commerce.

These are ambitious goals, and their implementation will require considerable effort. The main risk is that companies will be faced with vague rules and legal uncertainty. This applies in particular to the envisaged generic duty of care to create an inherently fair digital environment and the obligation to ensure that personalisation is in the interests of consumers.

ACM will most likely not wait for these potential legislative changes, but will step up the enforcement of dark patterns before the end of this year already. It is organising a symposium on dark patterns, titled Fair Design in E-commerce, that will take place on 5 April, where it will consider, among other things, the implications for e-commerce practice of its recently updated Guidance on the Protection of Online Consumers. Companies will have to reckon with a more active regulator and are well advised to scrutinise their online shops, platforms, games and apps.

More information on consumer rules can be found at consumentenrecht.info

Information on dawn raids by ACM can be found at invalacm.nl

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