The European Commission’s proposed Digital Fairness Act would introduce new protections against unfair online commercial practices, alongside a separate enforcement reform that could see companies fined up to 6% of their annual global turnover.
From online subscriptions that are difficult to cancel to social media features designed to keep users scrolling, the EU says it wants to make the digital economy fairer for consumers.
The European Commission unveiled its proposed Digital Fairness Act (DFA) on Wednesday, setting out new rules to tackle manipulative online practices, improve price transparency and strengthen protections for children.
“We are tackling the new unfair commercial practices that distort consumers’ choices and put pressure on them, undermining their ability to make informed choices,” said executive vice-president and EU tech commissioner Henna Virkkunen.
Among the measures presented in Brussels on Wednesday are a ban on manipulative marketing tactics, known as ‘dark patterns’; requirements for clear and transparent pricing; fairness by design for digital platforms and services; the option for consumers to disable addictive design features; and new rules for influencer marketing.
A revision of the Consumer Protection Cooperation Regulation was presented alongside the DFA. It aims to grant the Commission stronger powers to investigate and issue fines directly in large-scale cases affecting consumers across multiple countries, such as the recently launched action against video game companies <a href="https://warsaw.today/korean-air-dallas-shanghai-china-871-roundtrip-including-all-taxes/” title=”Korean Air: Dallas – Shanghai, China. $871. Roundtrip, including all Taxes”>including Activision Blizzard.
“The Digital Fairness Act, together with the update to the Consumer Protection Cooperation Regulation, represents the most significant reform of EU consumer protection rules in more than 20 years,” said EU consumer protection commissioner Michael McGrath.
The proposals are the latest in a patchwork of EU laws being put forward in Brussels to regulate e-commerce and online consumer protection. They are also part of a wider push to rein in Big Tech companies.
The DFA would work alongside the recently proposed EU Kids Act, which aims to shift responsibility for protecting children online towards companies.
It would also complement the Digital Services Act and Digital Markets Act, which seek to make the online world safer, fairer and more transparent, as well as the AI Act, which governs the use of artificial intelligence.
Enforcement
The proposed revision of the Consumer Protection Cooperation Regulation would give the European Commission direct powers to investigate large-scale cases with a major impact on consumers across multiple EU countries.
It would also speed up and improve coordination between national consumer authorities in cross-border cases, setting deadlines for key steps and improving how penalties are coordinated, for example when fines are collected in different jurisdictions.
Companies found to have violated consumer protection rules in these large-scale cases could face fines of up to 6% of their annual global turnover. The DMA already allows for fines of up to 10%, while the DSA provides for fines of up to 6%.
This approach has had mixed results in the EU. While some cases, such as Apple’s €500 million fine in April last year, have brought about changes to its App Store policies, others, such as Google’s antitrust cases, have had more limited results in changing behaviour.
Crucially for Big Tech, non-EU companies would be required to appoint a legal representative in the EU to cooperate with national authorities and the Commission.
Stronger consumer protections
The DFA introduces several proposed protections for consumers online, including a ban on ‘dark patterns’ – such as fake claims that a product is almost sold out to pressure consumers into making a purchase.
Consumers would be given the option to disable addictive design features such as endless scrolling and autoplay videos.
Pricing must be communicated clearly and transparently. This applies in several areas, including dynamic pricing for tickets to sporting or cultural events, where prices must be displayed in real time to show consumers what they may have to pay.
The rules also cover virtual currencies, where conversion rates are not always clear. This can be an issue on platforms such as video games, where players make purchases using in-game currency rather than real money.
The DFA would also restrict practices that encourage children to overspend in video games, including gambling-simulating loot boxes and mechanisms that pressure them to pay to progress.
Examples include wheels of fortune features such as FIFA Ultimate Team packs. The proposed restrictions would not apply in the same way to adult gamers, for whom loot boxes and streak mechanics would remain permitted.
Online subscriptions and contracts must also be easier to cancel. Consumers would receive reminders before free trials turn into paid subscriptions, while automatic renewals would require a conscious choice rather than being a forgotten obligation.
Online consumers would also be able to reach a human being in customer service rather than being left with a chatbot.
The DFA also proposes rules for influencers for the first time, requiring content creators to disclose commercial content and preventing them from exploiting children’s trust.
It would also ban unfair personalised advertising and pricing that targets minors or exploits people’s vulnerabilities.
“The DFA will make sure the digital economy works for consumers, not against them,” said McGrath. “Businesses that play by the rules should not lose out to those that cut corners.”
The Commission’s impact assessment estimates that the rules would spare consumers €88.4 billion in financial losses between 2025 and 2035.
Including time lost to unfair practices, it puts the annual benefit at €13.7 billion, against recurring costs to businesses of €678 million a year, once overlaps between measures are accounted for.
Response
Tech leaders have cautiously welcomed the new rules, but some have raised concerns about mixed messages from Brussels.
While EU leaders have called for simpler rules across economic sectors since the European elections in 2024, this year has seen a glut of proposals, particularly concerning online platforms and services, raising concerns about potential overlap.
Isabelle Roccia, Managing Director for IAPP in Europe, told Euronews Next: “The rationale to update rules, some created 20 years ago, to digital economy makes sense, but there are rules already in place across consumer protection, privacy, platform regulation, AI, etc.
“Is the DFA introducing new tools that organisations, consumers and regulators don’t already have in their toolbox? Does it embrace the Commission’s simplification objective or unduly add to the complexity of online governance?”
Others feel the proposal is a good start, but that the devil will be in the detail.
Monika Zdzieborska, counsel in Clifford Chance’s Tech/Digital practice, told Euronews Next: “The debate is likely to centre on three fault lines. The first is coherence: does the DFA fill genuine gaps, or does it add another layer on top of the DSA, AI Act, GDPR and Kids Act?
“The second is defaults: should consumers have to switch off features designed to keep them engaged, or should those features be off from the start?
“The third is proportionality: should a shopping site, a streaming service, a game and a social network be regulated in the same way, or should the law reflect their very different risks?
“With the Kids Act on a parallel track, the two files will be negotiated side by side. Decisions on one, particularly on minors, addictive design and age checks, are likely to influence the other.”
On consumer rights, Itxaso Domínguez de Olazábal, policy officer at European Digital Rights (EDRi), told Euronews that the organisation was concerned that the proposal’s rules on addictive design still relied too heavily on individuals finding the off switch, rather than requiring companies to prevent harmful practices.
“The Commission has spent years studying how companies manipulate us online. Now comes the uncomfortable part: telling those companies to stop. Parliament and Member States have plenty of work ahead to give this law the teeth it deserves.”
The proposal must now be examined by MEPs and national governments before passing into European law.
Source: www.euronews.com
