The European Commission wants to crack down on misleading online business practices. New rules are intended to protect consumers from manipulative sales techniques used by tech companies, including addictive features and unwanted subscriptions.
In cases of serious violations, companies could face fines of up to 6 percent of their global annual revenue, Reuters reports. The proposed Digital Fairness Act (DFA) aims to give consumers more rights, but some companies have criticized it as overlapping with existing legislation and with a plan to protect children from online dangers.
The DFA must be approved by the European Union member states and the European Parliament in the coming months before it can take effect. The proposed law seeks to ban “dark patterns,” which encourage excessive spending, especially among young people.
The law would require companies to let users disable addictive design features in digital products. Influencers would also be required to be more transparent about commercial content.
The law specifically targets pricing practices such as dynamic pricing, in which ticket prices fluctuate based on real-time demand.
A plan to revise separate legislation, the Regulation on Consumer Protection Cooperation, would give the Commission the authority to investigate major cases across multiple EU countries and impose fines of up to 6 percent of a company’s global annual revenue.
Setback for Google
The EU is not only trying to limit the power of large technology companies through new legislation. Brussels also continues to exert pressure through existing competition rules. This is evident from a new development in a case against Google that has been dragging on for years, Reuters reports.
The company suffered a setback when the Advocate General of the European Court of Justice criticized a lower court’s decision to overturn a 1.49 billion euro fine. The fine was imposed on the American tech giant seven years ago for anti-competitive practices related to online advertising.
In 2019, the EU competition watchdog found that Google used restrictive contract clauses with publishers that prevented competitors from placing search ads on publishers’ websites. This reinforced Google’s dominant position in online search advertising.