It’s just over two years since the Digital Services Act and Digital Markets Act, two landmark pieces of EU law designed to create a more level playing field for big tech companies, came into force. As tends to be the case for any major new legislation, the full implications of these acts are still being worked out by the media and advertising industries, as the back-and-forth between enforcement bodies and the businesses affected by these laws has steadily been playing out.
But already, the EU is putting together another new piece of legislation targeting the tech sector, the Digital Fairness Act, which is designed to crack down on unfair and manipulative practices by digital businesses that hurt consumers. While the proposal has flown under the radar somewhat, it could be hugely significant for media and advertising businesses.
The Basics
Back in 2022, the European Commission launched a digital fairness “fitness check”, to investigate whether EU consumer protection laws are sufficient for the current digital era. The study focused on three key directives: the Unfair Commercial Practices Directive, the Consumer Rights Directive, and the Unfair Contract Terms Directive, none of which are specific to digital businesses.
The findings, published in October last year, found a number of gaps. Despite the existence of these directives, consumers still report high levels of frustration with manipulative and unfair practices, which the fitness check said has been exacerbated by the speed and efficiency with which digital technologies can target consumers. The report conservatively estimated an annual cost to consumers equivalent to €7.9 billion per year.
The study also highlighted that enforcement is inconsistent and unclear, that there are legal uncertainties as to how exactly the directives apply to complex digital marketplaces, and that there are no incentives for businesses to go the extra mile in terms of adhering to the principles of the directives.
As a result, Ursula von der Leyen, president of the European Commission, proposed that the EU should develop “a Digital Fairness Act to tackle unethical techniques and commercial practices related to dark patterns, marketing by social media influencers, the addictive design of digital products and online profiling especially when consumer vulnerabilities are exploited for commercial purposes”.
The Technical Details
The Digital Services Act has already introduced new regulations around manipulative behaviours, specifically under Article 25 which states: “Providers of online platforms shall not design, organise or operate their online interfaces in a way that deceives or manipulates the recipients of their service or in a way that otherwise materially distorts or impairs the ability of the recipients of their service to make free and informed decisions”. Indeed, some respondents to the Commission’s public consultation argued that the EC should focus on enforcement of the DSA, rather than creating a new Act.
But the fitness check report states that the DSA, alongside other laws like the DMA and the AI Act, were not intended to address all problematic commercial practices, and often focus on specific types of businesses. Article 25 of the DSA, for example, specifically applies to online platforms, not all digital businesses. And a Digital Fairness Act which gives more clarity to specific bad digital practices could ensure more consistent consumer protection across the EU.
A draft law isn’t expected until 2026. But the fitness check report, as well as von der Leyen’s comments, suggest the areas that the DFA would cover.
The report investigated seven main areas which are problematic, or often have problematic practices: dark patterns, addictive design, personalisation, social media commerce and influencer marketing, contract cancellations and digital subscriptions, unfair contract terms, and automatic contracting. The first four of these were mentioned specifically by von der Leyen in her call for the DSA, and so would almost certainly be targeted by the law. These four also directly relate to media and advertising.
The term ‘dark patterns’ refers to design or functionality practices which manipulate users into taking actions which they otherwise wouldn’t have taken. The fitness check report lists presenting choices in a non-neutral manner, using fake countdown timers to create
urgency, using emotional manipulation to make consumers second-guess their indicated choice, phrasing questions using double negatives, and misleading consent options, e.g. in cookie banners as examples of dark patterns. A full explainer of dark patterns is available here.
Dark patterns, as mentioned, are common in cookie and data collection consent banners. Dark patterns in both of these cases are specifically prohibited by the General Data Protection Regulation, but privacy advocates argue that they continue to be prevalent.
Addictive design, as described by the report, is any design which induces digital addiction, and causes users to spend more time or money on a digital service or product than they would otherwise choose to. The report listed a number of design features it has concerns about, including autoplaying new content, allowing consumers to ‘pull’ an interface to manually refresh it, infinite scroll, content which is only temporarily available, and rewards for continued engagement.
With regard to personalisation, the report’s analysis was quite mixed. It cited data showing that the majority of EU consumers have concerns about how their data is used to personalise products, services, and ads, and believe their data is being misused. But it also acknowledged the commercial benefits of personalisation. The most likely areas for further legislation seem to be transparency and prohibition of personalisation in the most exploitative cases (for example, psychographic profiling that exploits personal vulnerabilities such as emotional distress, exhaustion, grief, physical pain, and influence of medication).
With social media commerce and influencer marketing, the main concern identified was transparency. Influencers promoting scams and other problematic products and services was also mentioned as a significant worry.
Will the DFA Have an Impact?
The extent of the DFA’s impact will obviously partly depend on the provisions included in the final document. On addictive design, for example, the legislation could call for a ban on some of the most addictive practices such as infinite scroll and autoplay, which would have huge implications for online video platforms. Or it could simply introduce requirements around screen time and parental controls.
Given that part of the intention of the law is to ensure more consistent and effective enforcement, it might be assumed that it would accelerate enforcement in areas which are already partly covered by other laws — for example the use of dark patterns. Whether it proves effective at this in practice won’t be known until the law is passed.
And that’s if it’s passed. US president Donald Trump’s vehement opposition to any regulation which impacts US companies has seen regulation take on even greater geopolitical significance than usual. While the EU has suggested crackdowns on US tech companies as a response to Trump’s tariffs, the DFA could find itself as a bargaining chip in US/EU relations.
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