EU Drafts Law Capping Tech Fines at 6% of Global Revenue
A new regulatory package targets subscription traps and dark patterns, though industry groups warn the rules may be too broad.
By Justin Barnes ·
Companies that violate the proposed Digital Fairness Act could face fines of up to six percent of their global annual revenue. The European Commission unveiled the draft legislation on Wednesday, aiming to give consumers tighter control over their online spending and time. The package targets common digital pitfalls, such as free trials that automatically convert into paid subscriptions without clear warning.
The proposal requires businesses to remind users before a free trial expires and to secure explicit consent before charging them. It also mandates that companies send reminders before auto-renewing contracts. The rules specifically address dark patterns, like fake scarcity warnings on hotel booking sites, and dynamic pricing. Sellers would have to display the current price and the maximum potential cost when prices change during an online queue.
Children’s online experiences face new restrictions. The draft bans paying to advance levels in online games and requires clear labeling for personalized advertising when minors are involved. Users would also gain the ability to disable features that encourage endless scrolling, such as video autoplay. Agustin Reyna, director general of the European Consumer Organisation, called the plan a starting point for stronger protection. "We haven't seen that kind of reform in consumer protection in the last 20 years," Reyna said.
Industry groups pushed back against the gaming provisions. Video Games Europe and the European Games Developer Federation described the proposal as unworkable and disproportionate. They warned that a broad ban on selling children features that help them advance could cover almost any in-game purchase. Christoph Busch, a consumer law expert at Osnabrück University, countered that businesses relying on addictive design features should review their models. "But then there is always the question of proportionality," Busch said, noting that legislators are balancing different interests.
Catalina Goanta, an associate professor at Utrecht University, described the act as a reasonable compromise but warned against overregulation. She suggested that enforcing existing rules might solve many current problems more effectively than adding new bans. Reyna disagreed, arguing that a single rulebook simplifies compliance for companies operating across the union. "Instead of having 27 different regulations to adhere to, companies will now only get one," he said.
The European Parliament and the Council must still agree on the final text. Experts expect changes during the negotiation process, particularly regarding the scope of the gaming rules. Busch predicted a difficult trialogue, citing the current political focus on deregulation and competitiveness. Reyna remained more optimistic, noting that consumer protection tends to bring political parties together because it delivers tangible outcomes to people.
The final adoption process will determine how strictly these new standards are applied. The draft remains in its initial legislative phase, with formal agreement required from both legislative bodies before the law takes effect.
