The UK is set to clamp down on the use of dark patterns by online retailers, with legislators and regulators placing increased scrutiny over the practice. The Competition and Markets Authority (CMA) announced its first investigation into the use of dark patterns in November of last year, with the announcement marking the start of its new programme of consumer enforcement work focused on "Online Choice Architecture". The programme aims to regulate online selling practices deemed manipulative or coercive, also known as "dark patterns" (see more below on what constitutes dark patterns).

The programme follows the launch of the CMA's Online Rip-Off Tip-Off campaign early last year, which detailed tips for shoppers to spot and avoid misleading online selling practices that could result in them suffering monetary or emotional harm. As part of the campaign, it was revealed that 71% of people shopping online had experienced misleading or deceptive selling tactics.

Sarah Cardell, interim Chief Executive of the CMA, said at the time "the CMA is today reminding businesses they should not use urgency claims to mislead consumers and, if they do, they face the risk of CMA action."

What constitutes dark patterns? 

"Dark patterns" is a term used to describe the practice of misleading consumers through digital design elements of an online interface, such as a website, that deliberately coerce or deceive visitors into doing things that they did not originally intend to do. The practice frequently takes advantage of visitor's habits when accessing websites and apps which can lead to consumers making unintended and harmful decisions, such as signing up for free trials that convert into paid subscriptions that are difficult to leave. Other tactics include emotional manipulation where websites claim that a consumer's friends will miss them to prevent them from unsubscribing from certain services, urgency tactics such as countdown clocks, and eye-catching discount offers that present a price reduction that in reality, may not be so significant.

The CMA's investigations

Emma Sleep, a mattress-in-a-box company, is currently being investigated for the use of pressure-selling tactics such as countdown timers and claims about the time limits for discounted prices ending, when such claims may have been inaccurate.

The Advertising Standards Authority (ASA) issued a ruling previously against Emma Matratzen GmbH, a subsidiary within the Emma Group company, for the use of a "Flash Sale" timer that was immediately followed by another sale. The ASA ruled that this was a breach of the CAP Code, specifically:

• rule 3.1 (advertisements must not be misleading);
• rule 3.7 (advertisers must hold documentary evidence substantiating the claims); and
• rule 8.17.4.e (advertisers must not change closing dates unless this is beyond the advertiser's control).

The CMA further warned, "this investigation into Emma Sleep is just the start of our work into potentially misleading online claims and all sectors are under scrutiny. Companies should take note: look at your own practices and ensure they’re in line with the law."

What are the regulators saying?

In the European Union, the Digital Services Act (DSA) which was adopted in October 2022, places an express prohibition on dark patterns. The DSA applies to all digital services that connect consumers to goods, services and content. It provides numerous protections for online consumers with the view of reducing the risk of harms or risks and places platforms under a transparency and accountability framework. Article 25 provides:

“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”.

Meanwhile, in the UK, it appears that regulators are catching up. While the term “dark patterns” is still relatively new, a number of activities that fall within its scope have already been banned. In particular, the ASA has prohibited the following:

• drip-pricing: where additional charges are only revealed at the final stage of the online checkout process;
• ad labelling: disguising adverts as something else to deceive consumers or failing to label adverts that have been paid for; and
• subscription traps: failure to state all of the significant conditions that are likely to affect a consumer’s decision to participate in a promotion.

In addition to the ASA’s efforts, existing legislation in the form of the Consumer Protection from Unfair Trading Regulations 2008 bans the following:

• bait advertising: luring in consumers with the promise of a sale or an unusually inexpensive item, but once the consumer is interested, making the product unavailable and directing them to a more expensive similar item;
• bait and switch: promoting one product with the intention of selling a consumer something else;
• limited offers: falsely claiming that a product or the particular terms on which it is sold, are only available for a limited time in order to deprive consumers of the opportunity to make an informed choice about their purchase; and
• false free offers: describing a product as free or without charge if the consumer has to pay anything other than delivery or collection fees.

Next steps

Last year, the Government revealed plans to enhance the powers of the CMA by enabling it to enforce fines of up to 10% of global annual turnover for breaches of consumer law. In the Chancellor’s Autumn Statement last year, the Government also confirmed that it would bring forward the Digital Markets, Competition and Consumer Bill in the third Parliamentary session, which would provide the CMA with new powers to tackle anti-competitive practice in digital markets. From what we can see so far, it is clear that regulatory intervention and penalties in this area are only going to increase in the near future.

For further information on this topic, please contact Amanda Leiu or another member of our Commercial team.

This article was written by Pooja Bokhiria.