EU proposes Digital Fairness Act to protect consumers

The act addresses a range of issues, including deceptive subscription practices, AI-powered shopping agents, and price gouging on tickets. EU Justice Commissioner Michael McGrath stated that the regulations will ensure companies compete on the merits of their products and services, “and not on their ability to exploit consumers or circumvent regulations.”

The DFA, described by McGrath as the most significant overhaul of European consumer protection law in over 20 years, is projected to save EU consumers up to €13.7 billion annually.

Key changes include simplified online subscription cancellations, strengthened consumer rights regarding ticket sales, online shopping, and computer game purchases, and measures to combat manipulative “dark patterns” – design elements intended to trick users into unintended actions. Companies will be prohibited from using phrases like “We’re sad to see you leave” during cancellations, which must be as easy as the initial agreement. Artificial scarcity tactics, such as falsely claiming limited product availability, will also be banned.

For ticket sales, the number of tickets offered at the starting and maximum price must be disclosed to combat dynamic pricing, where prices fluctuate based on demand. The proposal also includes options to disable features like endless scrolling and autoplay videos on platforms like TikTok.

The EU Commission is already investigating TikTok and Instagram for potential violations of the Digital Services Act (DSA) regarding addictive mechanisms, and negotiations are underway for a social media ban for children.

Additional measures target minors, including automatically disabling virtual currencies in video games unless parental consent is given, and prohibiting loot boxes – paid, random reward packages. Consumers will also have the right to speak with a human representative when facing issues, preventing reliance solely on AI-driven customer service. When using AI shopping agents, consumers must retain control, including the ability to set price limits, and companies will be prohibited from offering exclusive discounts or products through these agents.

German publishers have expressed strong criticism of the proposal, particularly regarding the new regulations for subscription-based businesses. The German Publishers and Digital Publishers Association (BDZV) and the Free Press Publishers’ Association (MVFP) stated that the proposals impose burdensome information requirements and bans on successful subscription models, significantly damaging the digital business of the press.