On October 28, 2021, the Federal Trade Commission announced the issuance of a new enforcement policy statement warning companies against using dark patterns that trick consumers into subscription services. The policy statement comes in response to rising complaints about deceptive sign-up tactics like unauthorized charges or impossible-to-cancel billing.
Dark patterns are tactics used by companies to trick consumers into making certain choices, such as purchasing a good, subscribing to a service, or agreeing to a contract. They often appear in the context of negative option marketing. “Negative option marketing” broadly refers to transactions containing terms or conditions under which the seller may interpret a consumer’s silence or failure to affirmatively reject or cancel a product as acceptance. Common examples include automatic renewal subscriptions, continuity plans, free trial programs and pre-notification plans.
With the new Enforcement Policy Statement Regarding Negative Option Marketing, the FTC aims to put companies on notice that they will face legal action if they employ harmful negative option marketing. The policy statement outlines existing statutory and regulatory requirements for negative option marketing and introduces new guidance to help companies comply with these obligations. The FTC guidance is framed by three key principles: disclosure, consent and cancellation. To avoid law enforcement action, the FTC states that businesses must provide clear and conspicuous disclosures, obtain consumers’ express and informed consent, and provide a simple, easy way for consumers to cancel.
In reference to the new policy statement, Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said “Today’s enforcement policy statement makes clear that tricking consumers into signing up for subscription programs or trapping them when they try to cancel is against the law…firms that deploy dark patterns and other dirty tricks should take notice.”