BRUSSELS — You know that customer-service bot that won’t let you cancel your subscription? The EU wants to kill it.
With a new law presented Wednesday, the European Commission will take aim at the endless array of practices websites have used over the past 20 years to make more money from consumers.
The Digital Fairness Act is the European response to a wider regulatory trend that has seen consumer authorities curb irksome and exploitative practices. These include dynamic pricing that changes ticket prices based on demand, cumbersome processes for canceling subscriptions and the near-complete surrender of customer service to automated systems.
According to a draft of the DFA obtained by POLITICO, the Commission will address several aspects of the design, service and terms under which businesses interact with consumers online.
“Europe should not accept a digital economy where profits depend on exploiting people’s vulnerabilities,” Spanish socialist lawmaker Laura Ballarín Cereza, a key European lawmaker on tech legislation, said in a statement.
Industry leaders have pushed back on this potential new rulebook ever since the EU executive began considering a revision of consumer law in 2022. They say current consumer protection and digital services laws already cover these practices. “Where existing rules already cover a practice, it should not be regulated or enforced a second time,” said Ben Brake, director general of tech lobby DOT Europe.
Consumer groups say existing rules, some dating back to 2005, are not clear enough and that many unfair design practices are still rampant.
The Commission would have the power to impose fines of up to 6% of global annual revenue for companies that violate the new law. Those penalties are similar to fines levied under the Digital Services Act, the EU’s platform rules meant to stop Big Tech platforms from provoking systemic, society-wide harms through everything from election interference to keeping minors away from violent content. The new law instead would apply to any business offering services to EU consumers online.
Dark patterns
The DFA would ban deceptive design known as “dark patterns,” which manipulate consumers through the use of such tactics as bright-colored buttons placed prominently to get customers to buy something. It also aims to ban personalized pricing that targets vulnerable consumers, including minors.
The practice of dynamic pricing is also targeted in the law. That’s when a seller adjusts the price based on conditions such as demand or a user’s location, and it is commonly used in the sale of concert and airline tickets. The proposed law requires transparency when customers are buying products whose prices are subject to change.
The DFA also covers consumer rights around “agentic commerce,” when artificial intelligence agents are used to find and complete purchases.
Four lawmakers from the conservative, socialist and liberal groups said the requirement doesn’t go far enough and that the DFA should completely ban dynamic pricing for cultural and sporting events, according to a letter obtained by POLITICO.
Sellers offering subscriptions will have to provide an easy way to cancel, reminiscent of New York State’s “click to cancel” rules. The new EU rules also require that a human is available for after-sales customer support.
The rules also address, for the first time, specific aspects of online gaming, including bans on video games that allow kids to pay to succeed and progress in the game.
The DFA is also trying to make its mark on what is known as “addictive design” of online platforms. This has already been the target of enforcement action in Europe and litigation in the U.S. in cases involving minors. But the new consumer rules would apply to adults as well, requiring online platforms to offer an opt-out from addictive features like autoplay.
Spain’s Ballarín Cereza thinks this is not enough, saying users should be opted out of these features by default. “Why should consumers carry the burden when companies deliberately design these addictive mechanisms? We must shift from consumer responsibility to corporate responsibility: safety and fairness must be the default, not an option,” she said.