Today, 11 November, the European Commission has proposed the Digital Fairness Act to complement the EU Kids Act proposal published earlier this year (previously discuss here), as well as other existing regulations such as the GDPR, Digital Services Act, EU AI Act and others.
The proposal will repeal and replace the Unfair Commercial Practices Directive and seeks to address unethical techniques, dark patterns and addictive design in relation to digital products.
There are two key components of the proposed Digital Fairness Act:
- it converts the current unfair commercial practices legal framework into a directly applicable regulation, reducing the fragmentation caused by the current varying national implementing regimes; and
- it expands the current regime to address shortcomings in respect of, for example, dark patterns, addictive design, and unfair marketing practices.
The proposal will have important implications for consumer-facing businesses operating in the EU, with particular relevance to those providing certain goods and services with digital elements such as video games, online marketplaces and those using AI or automated systems in consumer transactions.
The Digital Fairness Act was originally announced as part of the European Commission’s 2030 Consumer Agenda, building on the Commission’s 2024 Digital Fairness Fitness Check. It forms a part of a wider Consumer Package which also includes proposals to amend and revise the Consumer Rights Directive and the Consumer Protection Cooperation Regulation.
Core elements of the Digital Fairness Act
The Digital Fairness Act contains a wide range of measures targeted at addressing unfair consumer practices, including general restrictions on misleading actions and omissions, as well as the following key specific measures:
- prohibitions on dark patterns, including visual, auditory and other components which are likely to deceive or manipulate consumers in a manner that is likely to materially distort their economic behaviour;
- requirements to disclose influencer marketing in a clear, prominent and unambiguous manner;
- restrictions on profiling-based advertising targeted at minors and on certain advertising based on special category data, together with restrictions on personalised pricing based on profiling where it is reasonably likely to harm minors or vulnerable consumers;
- measures to address the user of virtual currencies and variable reward systems (ie, loot boxes) in video games;
- requirements to include tools to easily disable addictive design measures such as automatic play of content or infinite scroll, notifications not triggered by the user’s use, and features incentivising engagement at regular intervals;
- measures to ensure that online customer service is not limited only to virtual assistants, and that human assistance is available on request;
- consumer control and transparency requirements related to automated systems used by consumers to conclude and perform contracts, together with restrictions on traders requiring such use of automated systems by consumers; and
- prohibitions on automated direct marketing to consumer’s without their prior consent.
Under the Digital Fairness Act proposal, EU Member States will lay down the rules regarding enforcement and penalties for businesses that take part in unfair practices, while ensuring that penalties are effective, proportionate and dissuasive. In order to aid with enforcement, national courts and competent authorities will be enabled to request that evidence in relation to the design, operation and impact of commercial practices be provided by traders.
Next steps
The Digital Fairness Act proposal will now be negotiated by the European Parliament and Council of the European Union prior to entering into force. There will be in-depth trilogue negotiations, and changes to the initial proposals are to be expected before a final agreement is reached.
Under the Commission proposal, the Digital Fairness Act will enter into force on the twentieth day following its publication in the official journal, and apply 12 months from the date of publication. We will monitor the negotiations closely and provide any relevant updates.
Contact us
For more information please contact a member of the Technology and Innovation Group or your usual Matheson contact.
