On November 3, the Federal Trade Commission (FTC) filed a Complaint and Stipulated Order in federal court against an internet phone service provider to stop it from imposing junk fees and making it difficult for users to cancel their service. This action follows the FTC’s September publication of “Bringing Dark Patterns to Light,” a report demonstrating companies’ increased use of design practices known as “dark patterns” to influence consumers buying behavior (the “Staff Report”). The Staff Report is derived from a virtual workshop the FTC held in April 2021 addressing user interfaces across websites and mobile apps. In connection with announcing the Staff Report, Samuel Levine, Director of the FTC’s Bureau of Consumer Protection explained, “Our report shows how more and more companies are using digital dark patterns to trick people into buying products and giving away their personal information.” It was the FTC’s intent that the report “send a clear message that these traps will not be tolerated.” The FTC’s latest enforcement action confirms that message.
What are dark patterns?
Design specialist Harry Brignull coined the term “dark patterns” in 2010 to capture design practices used to trick or manipulate users into taking certain actions. As discussed in the Staff Report, dark patterns typically influence a consumer’s cognitive biases to drive their conduct or delay access to information to expedite decision-making. Dark patterns are used collectively for a targeted impact—encouraging consumers to take unintentional actions. Accordingly, companies may employ any combination of free trials, fees, data collection and reselling that have the net effect of collecting money or information from consumers when the consumers would not have done so if they had full knowledge about the product or service. As depicted in the Staff Report, dark patterns may be characterized as design elements that:
- Induce false beliefs, such as advertisements deceptively formatted to look like independent, editorial content, fake or paid endorsements and testimonials, stock availability, other users’ views, offer or cart countdown clock for price holding, and purportedly neutral comparison-shopping sites that actually rank companies based on compensation
- Hide or delay disclosure of material information, such as hidden fees and “drip pricing,” in which companies advertise only a fraction of the total price
- Lead to unauthorized charges, such as negative options, in-app purchases, upsell or bundle offers, and free trials followed by recurring subscription
Why do they matter to you?
You may think “dark patterns” connote bad behavior, of which you (the marketer or seller of gadgets or gigabytes) would never engage, but it covers a host of marketing techniques (several of which are noted above) that are subject to both existing and forthcoming laws and regulations. Whether such practices may be considered “dark patterns” depends on the overall communications presented to the consumer. This normally falls on whether the consumer is presented adequate disclosures—an inquiry that involves a consideration of both form and substance. That is, whether the disclosure is comprehensive such that the reasonable consumer would understand it and whether it is placed on the interface such that a reasonable consumer can access it in the course of making a purchase.
Key laws that govern dark patterns include:
- Section 5 of the FTC Act (15 U.S.C.§ 45(a)), which prohibits unfair or deceptive acts or practices in or affecting commerce.
- Restore Online Shoppers’ Confidence Act (“ROSCA”), which prohibits charging for goods and services sold over the internet using a negative option feature unless the seller (1) clearly and conspicuously discloses all material terms of the transaction before obtaining the consumer’s billing information; (2) obtains a consumer’s express informed consent before charging the consumer’s account; and (3) provides simple mechanisms for a consumer to stop recurring charges.
- Telemarketing Sales Rule (16 C.F.R. Part 310), which requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services.
Last month, the FTC announced proposed rulemaking to address certain deceptive or unfair acts or practices relating to fees. Companies should also be mindful of existing state privacy and negative option laws, as well as forthcoming state regulations, including the CCPA regulations that affect requirements about customers’ rights and method of consenting or opting in for data collection. As such, the regulatory landscape for dark patterns is ever changing and one to be closely monitored.
What can you do to address them?
In developing and increasing an online and mobile presence, companies should be transparent about customer data use, pricing, and other components involved with the customer experience. In developing customer policies and terms, the language should be easy to understand. Equally so, changing or otherwise terminating customer preferences and use should be easy to execute. Also, a method for obtaining express consent before the customer commits to taking a particular action should be built into any online or mobile interface. While not all-encompassing, these basic measures go against dark patterns and more to enlightening the consumer.
The FTC published helpful guidance on tackling dark patterns through the Staff Report and 2021 Enforcement Policy Statement. Heeding to the guidance produced by the FTC, ultimately, marketing tactics may attract customers but should not be intended to deceive them. Otherwise, as exhibited by the FTC’s latest enforcement action against dark patterns, failing to employ appropriate marketing and advertising could end up costing you … $100 million.