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In July 2024, the US Federal Trade Commission (FTC) announced the results of a review that found that 75.7% of companies that market and sell subscription services use at least one “dark pattern,” with 66.8% using multiple. The use of these techniques in your subscription business can damage your reputation and customer relationships, as well as lead to regulatory issues as these strategies come under more scrutiny. The full review details can be found in this report from the International Consumer Protection and Enforcement Network (ICPEN).
Dark patterns are practices companies employ that steer, deceive, coerce or manipulate consumers into making choices that are often not in their best interests. Specific indicators are detailed in a 2022 report from the Organization for Economic Cooperation and Development (OECD), which was a basis for the sweep. The FTC review was a global internet sweep performed in January and February 2024 by participants from 27 consumer protection enforcement agencies around the world.
The most frequent practices cited were “sneaking” – attempting to hide or delay disclosing information that is important to a consumer’s purchase decision (such as the inability of the consumer to turn off auto-renewal of a subscription service within a purchase flow) and “interface interference” (presenting a false hierarchy of subscription options by making one that is more advantageous to the business more prominent).
Other dark patterns observed include:
- Obstruction: rendering a task more tedious to discourage an action, such as subscription cancellation
- Social proof: attempting to convince consumers to make a decision based on the supposed behavior of other consumers
- Forced action: requiring consumers to enter payment information in order to access a free trial
- Urgency practices: providing a limit on the time or quantities available to purchase
- Nagging: repeated requests, such as via pop-ups
ICPEN is a global network of consumer protection law enforcement authorities that represents over 70 countries, and the FTC currently serves as its president. Given this and the ICPEN’s objective to influence consumer laws and regulations globally, we may see increased regulation prohibiting dark patterns and/or increased enforcement tying use of dark patterns to existing regulations, such as prohibitions on unfair or deceptive acts or practices (UDAP) in section 5 of the Federal Trade Commission Act.
In other words, in addition to a negative customer experience, complaints, chargebacks and/or reputational risks a merchant may encounter, businesses using these practices will be more likely to come under scrutiny of regulatory agencies and may be subject to fines and other financial damages to consumers.
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