The European Commission’s proposed DFA seeks to regulate business-to-consumer commercial practices across digital services, including dark patterns, personalised advertising, addictive design, influencer marketing, virtual currencies and automated contracting systems. The proposed Regulation also introduces requirements for subscription renewals, online contract termination, consumer-facing AI systems and price transparency in digital transactions.

Scope, definitions and dark patterns: The DFA covers business-to-consumer commercial practices before, during and after a transaction. It defines a minor as anyone under 18 and treats goods, services and digital content alike as a “product”. The general test remains in place: a practice is unfair if it breaches professional diligence and materially distorts consumer behaviour.

The Act also bans dark patterns. Traders shall not design online interfaces, including their visual and auditory components, in ways likely to deceive or manipulate consumers. An anti-circumvention rule also bars traders from undermining compliance through contractual, technical or behavioural techniques or interface design. Where the DSA, GDPR, AI Act, Digital Markets Act or proposed EU KIDS Act regulates the same aspect, those laws prevail.

Influencer marketing: The DFA defines influencer marketing as promotion in exchange for payment that uses an influencer’s popularity. Traders must disclose the commercial intent of each communication using the terms “advertisement” or “commercial collaboration”. On platforms covered by the DSA, they must use the disclosure functionality provided under that law.

The Act also prohibits the following influencer marketing practices:

• Directly exhorting minors to buy products or persuade their parents to buy them.
• Creating the impression of a non-commercial purpose, especially in content featuring minors.
• Implying that a product is suitable for minors when it is not.
• Promoting products whose advertising is prohibited or products that are dangerous.

Moreover, any trader hiring influencers must ensure compliance through contractual terms or other appropriate means where no contract exists.

Personalised advertising, pricing and ticketing: The DFA bars profiling-based targeted advertising in two situations. First, when the trader knows with reasonable certainty that the consumer is a minor. Second, when the trader uses the special categories of personal data defined under the GDPR. Traders are not required to collect additional data to verify a consumer’s age. However, this rule excludes online platforms covered by the DSA’s own advertising provisions.

The Act also restricts personalised pricing based on profiling. This restriction applies when the pricing is reasonably likely to cause harm to a minor or to a consumer made vulnerable by age, credulity, disability or misfortune.

Dynamic pricing is also subject to specific rules. For event tickets whose prices can increase through a trader’s actions or algorithms, sellers must disclose how many tickets remain available at the advertised price and the maximum price. Resellers must display the original total price, along with the ticket’s category, row and seat number. Similarly, a virtual queue must display the current price in real time, whether the price may vary and the maximum price.

Gaming monetisation: The DFA targets in-game and in-app spending in three ways:

• Virtual currencies: Traders must display the monetary value of items purchased using paid-for currencies. Where products target minors, or traders know with reasonable certainty that minors use them, these currencies must be disabled by default. Only parental or guardian approval can activate them.
• Variable reward systems, such as loot boxes: Traders must disclose the types of items available and the probability of obtaining each type. They must also provide tools to disable these systems and cannot offer them to minors.
• Pay-to-progress and pay-to-win mechanisms: Traders cannot offer these mechanisms to minors.

Notably, social networks, video-sharing platforms, AI companions and general conversational chatbots fall outside certain parts of these rules where the EU KIDS Act applies instead.

Addictive design: The DFA applies to traders whose digital products encourage, or can reasonably be foreseen to encourage, compulsive or excessive use. These traders must provide easily accessible tools that allow consumers to disable the following four types of features, individually or all at once:

• Autoplay and uninterrupted content consumption without regular interruption points.
• Notifications that are not triggered by the consumer’s own activity.
• Features that reward engagement at regular intervals, including penalties or loss of benefits for failing to engage.
• Features that simulate interpersonal relationships, such as persistent prompts to continue engaging with an automated system.

The Commission can add or modify features through delegated acts. The rules do not cover practices concerning minors that fall under the EU KIDS Act. In addition, DSA authorities will supervise online platforms, while AI Act authorities will supervise providers and deployers of AI systems.

Subscriptions and exit rights:

• Free trials: Traders must send consumers a reminder on a durable medium before the trial ends. The reminder must state the end date, price and termination terms. Without this reminder or the consumer’s express agreement, the consumer is not bound by the contract.
• Contracts of six months or longer: Traders must send reminders no earlier than one month and no later than 14 days before an automatic extension. Otherwise, consumers can terminate the contract free of charge at any time.
• Contracts under six months: Traders must send reminders one week before an extension that brings the contract’s duration to six months, or before the tenth extension, whichever comes first.
• Termination function: Traders must provide a button labelled “terminate the contract here”, followed by a confirmation button labelled “confirm the contract termination”. They must acknowledge the termination within one week.
• Withdrawal function: Traders must provide a button labelled “withdraw from contract here”, which must remain available throughout the withdrawal period.

Automation, AI agents and customer service: Traders operating online customer service must offer consumers the option to communicate with a human being on request when other means of communication are ineffective. The DFA also regulates automated systems that conclude contracts on behalf of consumers.

On first use, consumers must be able to choose one of three settings: confirm all contracts; confirm only contracts meeting specified criteria, including a maximum price and time limit; or confirm none. Traders must send confirmation of the consumer’s choice on a durable medium. Consumers can change these parameters at any time.

Furthermore, the system must disclose any payment or conflict of interest. In such cases, it must require consumer confirmation regardless of the selected setting. Traders may use the European Business Wallet or European Digital Identity Wallet for authentication but cannot require consumers to use automated systems to complete transactions. Contracts concluded solely through automated systems can provide the required information in a machine-readable format. Financial services are excluded from these automated-system rules.

Enforcement, penalties and timeline: Member States must provide adequate and effective enforcement mechanisms, including action by organisations and competitors. Courts and authorities can order a trader to cease an unfair practice even without proof of loss, intention or negligence. Consumers can claim compensation, a price reduction or contract termination.

Courts and authorities can also require traders to disclose evidence about the design, operation and impact of online practices, while taking trade secrets into account. A trader’s failure to disclose such evidence can count towards establishing that a practice is unfair.

The maximum fine must be at least 4% of a trader’s annual turnover in the Member States concerned, or at least 2 million euros where turnover data is unavailable. In widespread cross-border cases, the Commission can impose fines of up to 6% of worldwide annual turnover. EU KIDS Act authorities will enforce the gaming rules designed to protect minors.

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