San Francisco Frontiers - EU proposes broad consumer safeguards for apps, subscriptions and ticketing

The European Commission announced a sweeping set of updates to consumer law on Wednesday to protect European Union citizens from "harmful digital practices"—whether while online shopping, browsing social media, or doing their Duolingo lesson. Within the package, the Commission unveiled its Digital Fairness Act to address harmful practices online. Proposed rules include banning dark patterns—practices that manipulate consumers into making decisions they would not otherwise make, such as falsely claiming a product is running low. They will also curb dynamic pricing by ticket retailers, like Ticketmaster; force influencers to disclose when they are being paid to promote a product; outrule personalized advertising and pricing targeting minors or taking advantage of sensitive data; make digital subscriptions easier to cancel; and give consumers a right to interact with human customer service.

The package "represents the most significant reform of EU consumer protection rules in more than 20 years" according to Michael McGrath, the EC Consumer Protection Commissioner, noting that existing consumer rules were developed before ecommerce, the attention economy, and use of personal data for marketing took off. "The digital fairness act will make sure the digital economy works for consumers and not against them," he said at a press conference. The bill will also enable all consumers to turn off addictive design features on digital services, such as autoplay of videos and streaks—including on apps like Strava and Duolingo.

Some of these patterns the EU has already restricted for children through its Kids Act, which in addition to banning under-13s from accessing social media and chatbots, targets addictive designs in those services. Some European rights groups have called for those protections to be extended to all consumers and, teasing the Digital Fairness Act in September’s State of the Union address, President Ursula von der Leyen said: "But it is not only minors who are at risk. Addictive design, for example, is harming everyone. That is why we need a wider framework." Some of the risks are also already regulated by the EU Digital Services Act. On Friday, the European Commission said ByteDance’s TikTok had breached those rules with the "rabbit hole effect" of its "For You" feed algorithm which personalizes content recommended to users. The tech regulator had previously found TikTok’s "addictive design" broke the rules by including features such as infinite scroll, autoplay, and push notifications, in addition to the algorithm. In July, it found Meta to be in breach of the act due to similar features on Instagram and Facebook. If confirmed, both companies may now face fines of up to 6 percent of worldwide annual turnover.

The new regulation is designed to fill the gaps between this, the Digital Markets Act, and August’s AI Act, says executive vice president Henna Virkkunen, "not duplicate this." The package should simplify consumer protection rules across the bloc’s 27 members and be a "strong safety net in the digital world," she adds. The Commission aims to accelerate cross-border cooperation through strengthened enforcement rules. These would also give the regulator direct powers to investigate large-scale impact and fine firms up to 6 percent of their worldwide annual turnover. Non-EU companies would be required to appoint a local legal representative to cooperate with authorities.

U.Lee--SFF