EU's new rules target loot boxes, hidden ads, online manipulation
What's the story
The European Union (EU) has proposed a new set of regulations, the Digital Fairness Act (DFA), to protect consumers from unfair online practices. The DFA targets a range of issues including misleading pricing and availability, addictive design features like gaming loot boxes, and undisclosed influencer marketing. The EU Commission said the act will ensure fairer competition for businesses and save EU consumers up to €13.7 billion (or nearly $15.8 billion) annually.
Regulation details
'Dark patterns' in marketing to be banned
The DFA proposes to ban manipulative marketing practices, also known as "dark patterns," that trick consumers into making unintended decisions.
These include false claims about a product being nearly sold out.
The act also mandates businesses to give consumers the option to disable addictive features such as persistent prompts, infinite scrolling, and autoplay of videos.
This requirement extends to AI companions and general conversational chatbots.
Consumer protection
Protections for children and minors
The DFA also seeks to curb unfair practices that promote overspending, like gambling-like features (pay-to-win and pay-to-progress) for minors.
It mandates influencers to clearly disclose advertising content and prevents them from abusing children's trust.
The act also targets unfair personalized ads and prices targeting minors or exploiting sensitive data.
It aims to make subscriptions and digital contracts easier to cancel with reminders about upcoming automatic renewals and free trial periods ending.
Transparency requirements
Other notable provisions in the DFA
The DFA also requires clear and transparent pricing, especially concerning dynamic pricing and purchases using virtual in-app currency.
Companies will have to display real-time prices when consumers are waiting in virtual queues for cultural and sports event tickets.
The act also gives consumers the right to interact with a human customer service representative, ensuring clear rights when using an AI agent for purchases.