November 28, 2022

Volume XII, Number 332


November 28, 2022

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Dot Com Disclosures and Dark Patterns

The US Federal Trade Commission (FTC) is considering updating and reissuing its guidance document on digital advertising, with the aim of tightening legislation against online consumer manipulation.

The FTC recently requested comments on potential updates to its .com Disclosures: How to Make Effective Disclosures in Digital Advertising guide, which aims to ensure online advertisers disclose information clearly and conspicuously on websites or mobile applications to avoid deceptive statements that may harm consumers.

The FTC issued the guide in 2000 to address illegal online advertising and marketing practices that impact companies and consumers globally. It was revised in 2013 and, although its principles are timeless, much has changed in the digital advertising environment in the last two decades, requiring additional considerations and input from the Commission and the public. Specifically, the FTC seeks input on addressing “dark pattern” designs and advertising used to manipulate consumers on websites and mobile applications; hyperlink use and labelling; determining online disclosure adequacy when there are multiple webpages consumers must pass through; mobile device and space-constrained advertising; multi-party selling arrangements (online markets, website referrals, etc.); and social media sponsorships and promotions.

The FTC has focused its efforts on increasing enforcement against illegal dark patterns that may deceive or trap consumers into signing up for subscriptions. For example, some websites employ “negative option” marketing, where a consumer’s silence or failure to affirmatively reject a service or product is considered consent; examples include automatically renewed subscriptions, free trials, and pre-notification plans.

Websites may also require consumers to navigate through multiple screens or checkboxes to avoid extra charges for unwanted services, or sneak extra products  into a consumer’s online shopping cart without the consumer’s awareness or consent. In October 2021, the FTC released an enforcement policy statement forewarning companies that they will face legal consequences if their sign-up processes do not require obtaining a consumer’s informed consent, fail to provide clear and conspicuous information prior to signing up, and make cancellation difficult for a consume.

The FTC aims to increase enforcement in the digital advertising space and seeks to address many of the technology changes that have emerged in the online advertising space in recent years. However, by focusing on clear and conspicuous disclosure, obtaining consumers’ express and informed consent, and ensuring ease of cancellation for consumers, companies selling products and services online worldwide can avoid legal action and consequence.

© 2022 McDermott Will & EmeryNational Law Review, Volume XII, Number 270

About this Author

Lesli C. Esposito Washington D.C. Partner antitrust consumer protection Lawyer McDermott Will & Emery Law

For more than 20 years, Lesli C. Esposito has helped clients around the globe navigate complex antitrust and consumer protection matters. She has deep experience handling government investigations, litigation, compliance, and global merger control on behalf of clients in diverse industries, including consumer products, retail, technology, pharmaceuticals, healthcare, telemarketing, oil and gas, mortgage lending and professional services.

Marisa Reese E Poncia Attorney McDermott

Marisa (Reese) E. Poncia focuses her practice on antitrust matters and competition law, including antitrust litigation and compliance matters, as well as mergers and acquisitions (M&A) transactions and consumer protection.

Reese focuses her work across a variety of industries, including the pharmaceutical, healthcare, aerospace and defense and energy sectors. Additionally, Reese maintains an active pro bono practice centered on immigration/asylum matters.

While in law school, Reese served as staff editor for the Georgetown Journal of Gender and the Law, which...