A new Digital Fairness Act, presented Wednesday by the European Commission, update consumer protection rules to ensure that consumers in the EU enjoy the same high level of protection online as they do offline.
The Commission is also proposing a revision of the Consumer Protection Cooperation Regulation (CPC Regulation), which would grant the Commission stronger powers to directly investigate and issue fines in large-scale cases that have a significant impact on consumers across the Single Market.
Unfair commercial practices online, such as manipulative marketing tactics or hidden fees, undermine consumers’ ability to make free and informed choices, says the Commission. These proposals will equip the EU with stronger tools to tackle these unfair practices, strengthen enforcement across the Single Market and simplify the rules businesses must follow, increasing compliance. The result, says the EU executive, will be better protection for consumers and fairer competition for businesses, which all in all are expecting to save EU consumers up to €13.7 billion a year.
“The Single Market lives through its 450 million consumers. Our laws must keep up with the way people live, shop and do business today”, said EC executive vice-president Henna Virkkunen: “This reform will make everyday life simpler, fairer and safer for consumers, while giving businesses the clarity and confidence they need to thrive.”
The Digital Fairness Act proposal allows EU authorities to tackle unfair practices in digital markets more effectively, ensuring that all traders play by the same rules. The DFA will protect consumers of all ages shopping and browsing for goods or services online.
Highloights of the proposal include:
- A ban on manipulative marketing tactics (so-called “dark patterns”) such as fake claims that a product is almost sold out that pressure consumers into purchasing decisions they might not otherwise make.
- Clear and transparent pricing, particularly prices of purchases made with virtual in-app currencies and when dynamic pricing is used for cultural and sports events. In virtual queues, companies will have to show the current price in real time and the highest possible price.
- Fairness by design, with the option for consumers to turn off addictive design features that encourage excessive or compulsive spending, such as persistent prompts. The proposal will also restrict unfair practices that encourage overspending, for example by banning gambling-like features for minors, such as pay-to-win and pay-to-progress.
- Clear disclosure of influencer marketing, requiring influencers to be transparent about commercial content and preventing the exploitation of the trust of minors in their audience.
- A restriction on unfair personalised ads and prices that target minors or take advantage of sensitive data.
- Digital contracts and subscriptions that are easier to cancel and an end to unwanted automatic renewals and free trials turning into subscription traps. Consumers will have the right to communicate with a human in customer service and will have clear rights when using an AI agent to buy products on their behalf.
The Digital Fairness Act proposal also contains ‘simplification’ measures and the proposals include a simplification directive with targeted amendments to the Consumer Rights Directive to simplify its application online. This includes simpler pre-contractual information requirements for repeat in-app purchases and clearer rules on how consumers can cancel digital media subscriptions within the withdrawal period.
Alongside this A centralised enforcement of EU consumer rules will help deal swiftly with high-impact cases, increasing the deterrence of EU rules, shielding honest businesses from unfair competition, and protecting consumers from harm.
The revision of the CPC Regulation proposes to:
- Give the Commission direct powers to investigate large-scale cases with a major impact on consumers across the Single Market, with fines of up to 6% of a company’s worldwide annual turnover.
- Speed up and improve coordination of national consumer authorities in cross-border cases, setting timelines for key steps and improving how penalties are coordinated, for example when fines are collected in different jurisdictions.
- Strengthen enforcement against non-EU companies, by requiring them to appoint a legal representative in the EU to cooperate with national authorities and the Commission.
The proposals will now be discussed by the European Parliament and EU Council.
Consumer Protection Cooperation Regulation website
Digital Fairness Act (DFA) Regulation
DFA – Proposal amending the Consumer Rights Directive
Revision of the Consumer Protection Cooperation (CPC) Regulation
