EU Digital Fairness Act consumer protection proposal, Digi Mart USA News: The European Commission has proposed its new Digital Fairness Act (DFA), which it describes as the most significant upgrade to consumer protection laws in more than two decades. The proposal aims to give consumers added security against common tactics businesses use online, including addictive designs and practices that encourage overspending.
The bloc has repeatedly targeted companies such as TikTok, Meta, Temu and Shein over concerns that their platforms used such tactics to pressure consumers into decisions they might not otherwise make. EU executive vice-president for tech sovereignty, security and democracy Henna Virkkunen pointed to manipulative design practices, known as “dark patterns,” as a clear example.
She noted that shoppers have often encountered fake urgency tactics, such as claims that “only five items remain.”
The new law is designed to complement the bloc’s existing rules for online businesses and services, including the Digital Services Act (DSA) and the Digital Markets Act (DMA). The EU also relies on its AI Act, described as first-of-its-kind legislation, and its comprehensive data protection law, the GDPR, to further protect consumers online.
The proposal targets a wide range of consumer issues, including unfair personalization that exploits vulnerabilities, “obscure” dynamic pricing and misleading pricing practices. It also addresses obstacles in managing online contracts, such as difficulty cancelling, automatic subscription renewals, unwanted conversion of free trials into paid versions, and the inability to reach a human operator.
The law also seeks greater transparency in how social media influencers conduct marketing, as well as in personalized commercial practices. Children would not be exposed to practices such as gambling-style loot boxes or mechanisms that pressure them to pay to progress in video games, the EU said.
Proposed changes to the bloc’s consumer protection cooperation regulation would give the Commission direct investigation and sanctioning powers in very large-scale cases. These powers would include the ability to impose fines of up to 6% of a trader’s worldwide annual turnover.
Amendments to the consumer rights directive would streamline upfront information for repeat in-app purchases and clarify how consumers can cancel subscriptions.
The changes are part of the Commission’s consumer package, which aims to expand and simplify consumer laws across the bloc as part of a broader effort to cut unnecessary red tape. Earlier this September, the bloc announced a proposed EU Kids Act that would ban social media for children under 13.
Virkkunen said, “Europe already has a strong digital foundation. With the new Digital Fairness Act and the revised Consumer Protection Cooperation Regulation, we update our safety net consumer rules for the digital age.”
The not-for-profit Computer & Communications Industry Association (CCIA) warned that the proposed law could risk further regulatory inflation. CCIA Europe policy manager Albane Vannier said, “The Digital Fairness Act creates an enforcement maze.
Having multiple national and EU authorities oversee very similar practices under different EU laws is a recipe for inconsistent enforcement and unnecessary compliance costs.”
