EU draft law sets fines of up to 6% of global turnover for unfair digital trade practices
The European Union is preparing a new digital consumer protection push that targets manipulative online design and advertising practices. The proposed Digital Fairness Act would also require greater transparency on dynamic pricing and tools for users to switch off addictive platform features.
Highlights
- European Commission's Digital Fairness Act would fine companies up to 6% of global turnover for unfair digital trade practices, including dark patterns.
- The draft law proposes banning personalised advertising targeting children and mandates disclosure of available items for dynamic pricing by tech and e-commerce firms.
- Companies must allow users to disable addictive features, though Finance Watch criticises the proposals for insufficient protection for online financial service consumers.
Draft rules target dark patterns and child advertising
As reported by Reuters, a European Commission draft law shows companies found guilty of unfair digital trade practices could face fines of as much as 6% of annual global turnover. Justice chief Michael McGrath is set to present the proposed legislation, known as the Digital Fairness Act, on Wednesday, after which it must be negotiated with EU countries and the European Parliament before it can become law.The draft would ban so-called business-to-consumer dark patterns, deceptive or manipulative interface designs on websites and apps that steer users into buying more, by classifying them as unfair commercial practices. The Commission also wants to ban personalised advertising aimed at children or vulnerable consumers.
Broader compliance pressure for tech and e-commerce groups
The proposal adds to Europe’s broader effort to push Big Tech, e-commerce and social media companies to take stronger responsibility for practices on their platforms. Under the draft, companies using dynamic pricing would have to provide more transparency by disclosing how many items are available at the advertised price.Traders would also have to give users the option to switch off addictive features that encourage compulsive or excessive use. Finance Watch said the draft does not go far enough to protect consumers investing online, with senior research and advocacy officer Peter Norwood saying the measures on dark patterns move in the right direction but lack sufficient ambition for financial services consumers.
Earlier, we reported that Malaysia was drafting the e-Commerce Bill to strengthen its digital trade ecosystem and enforcement coordination.
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