By a unanimous 5-0 vote, the Federal Trade Commission last week released a staff report that sheds light on the agency’s enforcement positions and priorities regarding digital “dark patterns,” which the FTC defines as interface designs used to manipulate consumers into making decisions about purchases and personal data that they otherwise would not have.
Stemming from a public workshop the FTC hosted in April 2021, the report, “Bringing Dark Patterns to Light,” uses examples and illustrations to catalog and criticize numerous commonly seen practices in e-commerce, and includes an appendix describing types of dark patterns, while also stressing that dark patterns have a stronger effect, and by extension cause greater consumer harm, when they are used in combination, rather than in isolation.
Given Chair Lina Khan’s ambitious enforcement and policy goals for the agency, which we’ve previously discussed, anyone who engages with consumers online should consider the report both a reference and a warning.
The report broadly categorizes dark patterns into four sections:
- Design Elements That Induce False Beliefs – These are tactics that the FTC believes mislead consumers. Many are disguised advertisements, including advertisements deceptively formatted to appear as independent, editorial content and neutral comparison-shopping sites whose rankings are in fact based on compensation. The report also called out features like fake countdown timers and scarcity/demand claims that seek to induce a consumer to act quickly and urgently, short-circuiting the consumer’s typical decision-making process.
- Design Elements That Hide or Delay Disclosure of Material Information – According to the FTC, these tactics hide or delay the disclosure of material information, such as key limitations and fees. The FTC cited as examples obscure buttons that consumers are unlikely to click on and buried fee disclosures in an un-bolded list sandwiched between bolded text. The report also denounced “drip pricing” – where only part of a product’s total price is advertised and mandatory charges are not disclosed until late in the purchase process – explaining that such practices “weaken competition by making it harder for consumers to price-compare across sellers” and entrap consumers into completing a purchase because they “feel committed…by the time they reach the checkout screen.”
- Design Elements That Lead to Unauthorized Charges – In this category, the FTC took aim at negative option offers and subscription services. We’ve previously discussed the FTC’s campaign against negative options, so the FTC’s inclusion in the report comes as no surprise. One of the ways the FTC is targeting negative option programs is through the Restore Online Shoppers’ Confidence Act (ROSCA). Under ROSCA, companies cannot charge customers for a negative option product unless all material terms are clearly and conspicuously disclosed prior to obtaining billing information, the consumer expressly consents to the charge, and the company provides an easy mechanism for canceling the program and preventing further charges. As detailed in the report, dark patterns can result in violations of each of these requirements.
- Dark patterns can obscure material terms—in particular, the fact that a free trial will convert to a paid subscription absent cancellation.
- Dark patterns can also mislead the consumer into providing consent by failing to disclose that the consumer is signing up for recurring charges. The FTC noted that this scenario is common among mobile apps that target children, who may be deceived into making purchases or enrolling in subscription services because they believe that by hitting the purchase button, they are still playing a game.
- Finally, dark patterns can discourage or prevent the consumer from canceling the subscription by making it difficult to find the cancellation option or subjecting the consumer to emotional appeals prior to permitting cancellation.
- Design Elements That Obscure or Subvert Privacy Choices – Finally, the report concludes that dark patterns can be used to obtain private information and data from consumers that they did not intend to provide, in ways analogous to how dark patterns manipulate consumers into making unintended or undesired purchases. These techniques discourage or prevent a consumer from refusing to share data, and include tactics like repeated prompting to share data, confusing privacy settings, making the choice to share data more prominent than the choice to decline, obscuring the settings to prevent data sharing, and making sharing data the default setting. Using these techniques, companies can collect personal data like telephone numbers, location data, browsing history, and television patterns, all of which can be used to extrapolate more information about a consumer. The report notes that much of this data is unnecessary for the provision of services or sale of goods, and instead represents a separate revenue opportunity for companies that then sell the data.
Based on the report, there are a number of recommended best practices for companies that engage in digital marketing:
- Consider the context and the results. The FTC has long stated that even factually accurate text could be deemed misleading if there are other indicators that customers are being misled. The FTC advised companies to “look not just at the effect their design choices have on sales, click-through rates, or other profit-based metrics, but also [at] how those choices affect consumers’ understanding of the material terms of the transaction.” This is a not-so-subtle warning for companies to be vigilant about identifying and remediating any design aspects that could induce false beliefs or otherwise deceive consumers.
- Include any unavoidable and mandatory fees upfront in the advertised price and as soon as possible in the checkout process.
- Present disclosures in a clear and conspicuous font based on the context in which it appears. For example, if the website has a dark, bolded font, disclosures should also appear in a dark color and should be as close to the same size as other text as possible. Avoid placing key terms in hyperlinks, pop-up windows, or drop-down menus, which may be further obscured or even impossible to see for consumers using mobile devices.
- The appearance of call-to-action buttons should not discourage customers from clicking on a certain, less desirable button. This type of design discrepancy can occur if a button is lighter in color, smaller, or placed in a less convenient place than the desirable button.
- Any marketing or sales practice that targets what the FTC has identified as vulnerable populations, such as the elderly, children, or individuals with limited English proficiency, should be analyzed to ensure the marketing is not taking advantage of vulnerabilities or discriminating on the basis of a protected characteristic.
- Particular care should be used when presenting offers that are likely to be viewed by children. Such offers should be clearly and conspicuously identified as sales offers that will result in charges and should be distinguished from the typical actions in a game. For example, if a game requires a child to press a button repeatedly and quickly, a button purporting to authorize a sale should not appear in the same place or have the same appearance.
- Offers presented to children or likely to be viewed on shared devices should include mechanisms to prevent a user from authorizing charges to another’s account, such as requiring a password.
- Minimize the collection of data to that which is useful or necessary for your business.
- Provide clear and conspicuous disclosures to consumers about what data is being collected and how the data will be used prior to obtaining affirmative consent to collect the data.
- Make the pathway to preventing data sharing easy to navigate and understand.
In issuing the report, the FTC has signaled, yet again, that it considers combating the use of dark patterns to be a top enforcement priority. This isn’t news, but thus far the contours of what the FTC considered to be a dark pattern were ill-defined. The report solidifies the FTC’s current approach and provides useful examples.
While some certainty is comforting, the report underscores that the FTC ultimately rejects a categorical approach in favor of an analysis that is highly context specific. As such, neither the report nor the examples are likely to be the FTC’s final word on the issue, and companies should not consider the report to be the definitive list of what constitutes a dark pattern.