The digital economy has transformed almost every aspect of how businesses engage with consumers. However, much of the EU's core consumer protection framework was developed in an era before social media influencers, behavioural advertising, app ecosystems, AI-driven recommendation engines and subscription-based digital services became central to everyday commerce. With the publication of its proposed Digital Fairness Act (DFA), the European Commission has signalled its intention to modernise EU consumer law.
Digital Fairness Act: a new chapter for EU consumer protection
The proposed DFA follows the Commission's Digital Fairness Fitness Check, which concluded that the EU's core consumer law framework remains broadly effective but increasingly struggles to address certain practices that have become commonplace in digital markets. The DFA is intended to serve a dual purpose: strengthening consumer protection while creating a more harmonised and predictable regulatory framework across the EU and protecting businesses that do the right thing.
Goodbye UCPD?
A key and fundamental element is the proposed replacement of the Unfair Commercial Practices Directive (UCPD), which has formed the backbone of EU consumer law since 2005. Importantly, the Commission is not abandoning the existing framework but retaining familiar concepts:
- the general prohibition on unfair commercial practices;
- misleading actions;
- misleading omissions;
- aggressive commercial practices; and
- a blacklist of practices that are automatically unlawful.
For businesses operating across multiple Member States, greater harmonisation may ultimately prove as significant as the substantive reforms themselves. Diverging national interpretations of the UCPD have long complicated cross-border compliance programmes, particularly for online services and platforms operating across the Single Market.
Dark patterns to be banned
Dark patterns would be banned by being added to the list of unfair commercial practices that are banned in all circumstances. These include practices such as:
- Fake claims that a product or service is running out ("Only 1 left", "5 other customers are interested in this!", etc.);
- Practices that shame consumers for not making choices that benefit the business ("We're sad to see you go", asking a consumer to click a button saying "I don't like good deals" to unsubscribe from a mailing list, etc.); or
- Default options that consumers have to reject, such as pre-ticked boxes or extra items added automatically to the basket.
Fairness by design
The Commission has also identified platform design as a major consumer protection issue. Particular concerns include:
- autoplay functions;
- persistent notifications;
- engagement-maximising design features; and
- digital environments aimed at children and young people.
The DFA would require fairness by design, with the option for consumers to turn off design features that encourage excessive or compulsive use, such as persistent prompts.
The DFA also clarifies the rules on virtual in-app currencies, which consumers can buy with real money to purchase virtual items, for example in video games. Companies will have to clearly show what these purchases are worth in real currencies. For minors, virtual in-app currencies will also have to be turned off by default. The DFA also bans features that encourage gambling-like behaviour or put pressure on minors. This includes loot boxes, which are paid virtual items that give a random reward, and pay-to-win or pay-to-progress features.
Personalisation under scrutiny
The Digital Services Act already bans online platforms from targeting minors with personalised advertising or targeting people based on sensitive data, such as on health or ethnic origin. The DFA augments this by introducing a restriction on unfair personalised ads and prices that target minors or take advantage of sensitive data. The Commission is concerned that some forms of personalisation may exploit individual vulnerabilities or distort consumer decision-making.
Pricing
The DFA will seek to address dynamic pricing, drip pricing and misleading price comparisons. Companies will need to inform consumers waiting in virtual queues about how the price is changing in real time and the maximum possible price. Companies will have to show the full price from the start, including additional fees, taxes, and charges. This will effectively ban drip pricing. Companies reselling event tickets will also clearly have to show the total price of the original ticket, as well as the ticket type, row and seat number, where relevant.
Influencer marketing
Under the DFA, influencers will need to clearly disclose when they are being paid to promote a product, rather than misleadingly present the sponsored content as personal advice. They will also not be allowed to promote products which, under existing laws, cannot be legally advertised, are dangerous or present products as appropriate for minors when they are not. Brands and agencies will have to ensure that influencers comply with their obligations. The ASA and CMA in the UK have focused extensively on influencer disclosure requirements.
Subscription models face renewed scrutiny
Subscription-based business models have become an increasingly important source of recurring revenue across sectors ranging from streaming services and gaming to software, fitness platforms and retail memberships. However, regulators have expressed continuing concerns regarding:
- auto-renewals;
- difficult cancellation processes;
- inadequate reminders;
- complex contractual journeys; and
- subscription practices that may result in unintentional continued payments.
The DFA will require a simple, unambiguous cancellation option for digital contracts, as well as clearer information before free trials end or subscriptions are automatically renewed. It will also require active confirmation before free trials are converted into a paid contract.
The Commission's proposals also include a simplification directive with targeted amendments to the Consumer Rights Directive to simplify its application online. This includes simpler pre-contractual information requirements for repeat in-app purchases and clearer rules on how consumers can cancel digital media subscriptions within the withdrawal period.
Agentic AI
The CMA recently updated its guidance around agentic AI and consumer protection. The DFA would mean that consumers will have the right to communicate with a human in customer service and will have clear rights when using an AI agent to buy products on their behalf.
Enforcement
The allied revision of the Consumer Protection Cooperation Regulation proposes to:
- Give the Commission direct powers to investigate large-scale cases with a major impact on consumers across the Single Market, with fines of up to 6% of a company's worldwide annual turnover.
- Speed up and improve coordination of national consumer authorities in cross-border cases, setting timelines for key steps and improving how penalties are coordinated, for example, when fines are collected in different jurisdictions.
- Strengthen enforcement against non-EU companies, by requiring them to appoint a legal representative in the EU to cooperate with national authorities and the Commission.
Next steps
The legislative process will take time, and the text is likely to evolve through negotiations between the European Parliament and the Council of the European Union. However, many of the practices targeted by the DFA are already attracting attention, so it's worth reviewing your consumer journeys now. The proposed changes will affect some sectors (such as video gaming) more than others. If you need more assistance, please consult our Consumer Law Hub or contact a member of the team.
