Digital Fairness Act: no pause for tech regulation in Brussels, albeit in a different form

During the previous mandate, key European regulations for the digital sector were adopted such as the Digital Markets Act (DMA), the Digital Services Act (DSA) and the Artificial Intelligence Act (AI Act). Most of these texts still need to be fully implemented and effectively enforced. This has not prevented Ursula Von Der Leyen, President of the European Commission, from announcing a major new text on September 18 - the Digital Fairness Act (DFA).?

While the digital industry and Member States called for a “regulatory pause”, the Commission is pressing ahead with its drive to regulate the digital sector, this time through a reform of EU consumer law. The DFA will bring up key issues for the sector and trigger heated debates over the next few years. The text will also overlap at least in part with other crucial digital regulations adopted in recent years.?

Consumer protection: the European Commission's new approach to digital regulation

Announced officially in the mission letter of Michael McGrath, Commissioner-designate for Democracy, Justice and Rule of Law, the DFA will take place in a wide-ranging European Consumer plan for the next mandate.?

For the last few years, the European Commission looked into new commercial practices in the online world that would undermine consumer choice. To this end, it carried out a consultation, the results of which were published in October 2024. According to the Commission, the current EU consumer law framework needs to be updated to address the “prevalence of multifaceted problems that consumers encounter in the digital environment”.?

Although the DFA focuses on consumer law, digital industries are directly targeted. The Commission aims at tackling dark patterns, addictive designs, targeted advertising, influence marketing, personalization and recommendation systems, as well as unfair contractual practices. According to the report, the situation is a source of damage and additional costs for consumers worth 7.9 billion euros a year.

Intense lobbying was carried out during the last mandate in favor of this digital overhaul of consumer law. The European Consumer Organisation (BEUC) played a central role in the discussions and published a report on the subject in 2023. The European Parliament has also adopted a clear position on the subject, as illustrated by the own-initiative report on addictive designs adopted in November 2023.

?Likely direction of travel for the new Digital Fairness Act

The results of the consultation (fitness check) give first indications on the potential objectives that will be followed by the Commission in the upcoming Digital Fairness Act:

• Further regulation of targeted and personalized advertising: The Commission is critical of personalized advertising, especially in terms of transparency, and of practices that could harm vulnerable people and lead to a loss of consumer trust.?
• A new definition of digital vulnerability: mentioned several times by the European Commission in its report, a new definition of vulnerability would result in stricter obligations on economic players. This new definition would allow a better protection of vulnerable consumers against what is considered an unbalanced relationship with platforms.
• Addressing dark patterns: The European Commission wants to address what it broadly defines as “commercial practices deployed through the framework, design or functionality of digital interfaces or system architecture that can influence consumers to make decisions they would not otherwise have made”.
• Tackling addictive designs: The DFA intends to target certain addictive practices used mostly by video games and social networks. The Commission aims to fight the “addictive nature of certain digital services, such as online games, social media, streaming services and online marketplaces, which exploit people's vulnerabilities to capture their attention and monetize their data”. Measures such as a ban on infinite scrolling and on some uses of virtual currencies or loot boxes in video games are mentioned.
• Regulation of influence marketing: the DFA could be part of the regulatory framework that the European Commission intends to impose on influencers, inspired in part by France law on the subject.
• Changes to contractual practices: the Commission intends to review rules on some contractual terms, in particular regarding the cancellation and renewal of contracts as well as subscriptions, including those for cultural products and services. This could involve easier cancellation, mandatory reminders for automatic renewal, or explicit consent for free trials.?

At Mazagan, we are working on many aspects of this upcoming text, so please do not hesitate to reach out to us if you'd like to discuss it!