January 25, 2022

Volume XII, Number 25

Advertisement
Advertisement

January 24, 2022

Subscribe to Latest Legal News and Analysis
Advertisement

FTC To Focus Enforcement Efforts on Dark Patterns

The Federal Trade Commission recently issued a new enforcement policy statement about “dark patterns:” programs that attempt to “trap” consumers into service contracts. These programs usually take the form of negative option marketing programs, according to the FTC, and are regulated under most states’ laws as well as the Restore Online Shoppers Confidence Act (ROSCA).

Negative option programs begin as a free service, with a fee charged after a certain period of time. Under both ROSCA and state laws, companies must clearly and conspicuously disclose material terms to consumers before they make a purchase. They must also get express consumer consent to the negative option program, and give people an easy way to cancel.

With this new enforcement policy statement, the FTC is indicating that it will increase its scrutiny of these programs. In the statement, the FTC warned against taking silence for acceptance, reminded companies of their obligations under ROSCA, and warned against engaging in practices that might be viewed as a deceptive or an unfair act. The policy statement gives companies some guidance‒ and reminders‒ about what is expected. These include:

  • Making clear and conspicuous the terms of the program, such as the fact that the consumer will be charged and that charges may increase after an initial period.

  • Disclosures should appear “immediately adjacent to the means of recording the consumers’ consent” and before the consumer makes the decision to buy.

  • The consent itself should be “express” and “informed.” A pre-checked box, the FTC indicated, is not sufficient. And information about the program should not be buried in “extraneous language” that isn’t related to the consent.

Finally, the FTC reminds companies of the need to provide consumers with a simple and easy way to cancel negative option contracts.

Putting it Into Practice: This enforcement policy statement signals the FTC’s increased scrutiny of negative option programs. It also gives direction about what it considers to be appropriate “express informed consent.” 

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 313
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Liisa Thomas, Sheppard Mullin Law Firm, Chicago, Cybersecurity Law Attorney
Partner

Liisa Thomas, a partner based in the firm’s Chicago and London offices, is Co-Chair of the Privacy and Cybersecurity Practice. Her clients rely on her ability to create clarity in a sea of confusing legal requirements and describe her as “extremely responsive, while providing thoughtful legal analysis combined with real world practical advice.” Liisa is the author of the definitive treatise on data breach, Thomas on Data Breach: A Practical Guide to Handling Worldwide Data Breach Notification, which has been described as “a no-nonsense roadmap for in-house and...

312-499-6335
Staff Attorney

Harrison Schafer is a staff attorney in the Intellectual Property practice group in the firm's Chicago office. He is a Privacy and Cybersecurity Fellow and a member of the Privacy and Cybersecurity Team. He is a certified information privacy professional (CIPP/E and CIPP/US) by the International Association of Privacy Professionals (IAPP).

Areas of Practice

As a fellow, Harrison’s practice focuses on publishing articles covering relevant legal developments in the privacy and cybersecurity space to...

312-499-6371
Advertisement
Advertisement
Advertisement