Digital Fairness Act: EU Targets Subscription Traps, and the Ad Industry Pushes Back

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“We’re sad to see you go”: Brussels wants to ban lines like this when people cancel a subscription, and now it is mostly the advertising industry that is sad.

The European Commission has just presented its proposal for the Digital Fairness Act (DFA). EU Commissioner Michael McGrath, who is responsible for the file, called it the most significant overhaul of European consumer protection law in more than 20 years. “We expect these measures to bring EU consumers savings of up to €13.7 billion a year,” the Irish politician said. Because the DFA is planned as a regulation, it would apply directly in all member states.

What the Digital Fairness Act Proposes

• Subscriptions: Cancelling must not be significantly more complicated than signing up, and a few clicks have to suffice. After a free trial, consumers must give consent before it turns into a paid subscription.
• Dark patterns: Manipulative designs such as fake scarcity (“Only two left in stock”), pre-ticked add-ons and nagging pop-ups would be banned.
• Tickets: For dynamically priced tickets, for concerts for example, sellers would have to state how many tickets are available at the lowest and the highest price.
• Addictive features: Infinite scrolling, autoplay and streak rewards would not be banned, but users would have to be able to switch them off. The same applies to AI chatbots that simulate relationships to keep people on a platform longer.
• Advertising: Personalized ads targeting minors or exploiting consumers’ vulnerabilities would be prohibited. Influencers would have to clearly label paid content as advertising.
• Games: Virtual currencies would be switched off by default for minors and could only be activated with parental consent, and loot boxes would be banned for children.
• Customer service and AI agents: Customers would always have the right to speak to a human, ruling out customer service run entirely by AI. People who shop through AI agents would keep all their rights and must be able to set price limits, for example.
• Fines: In cross-border cases, the Commission would be able to investigate on its own and impose fines of up to 6 percent of a company’s global annual turnover.

IAB Austria: “Simplify, Don’t Duplicate”

IAB Austria, which with more than 200 members is the largest association of the country’s digital industry, considers most of this unnecessary. With the GDPR, the Digital Services Act, the Unfair Commercial Practices Directive and the AI Act, a comprehensive set of rules already exists, the association argues, and some of their effects cannot yet be fully assessed. Additional, overlapping rules would lead to legal uncertainty, diverging interpretations across member states and extra burdens, especially for small and medium-sized companies.

“No one in our industry questions that consumers must be treated fairly online. But fairness does not come from another layer of regulation, it comes from consistently enforcing the existing rules,” said IAB Austria President Hannes Wurzwallner. The Commission promised simplification, he added, and the DFA is the opportunity to deliver on that promise.

The association is particularly critical of concepts such as “dynamic vulnerability” or “emotional distress” as limits for personalized advertising. “Anyone who is supposed to recognize the emotional state of individual users in real time would have to collect exactly the sensitive data that the GDPR protects for good reason. That would be a contradiction in itself,” said Vice President Rut Morawetz. Instead, IAB Austria calls for five principles:

• Enforcement before new rules: Existing rules should first be consistently applied and evaluated.
• Clear terms: Verifiable definitions instead of subjective concepts.
• Youth protection: Risk-based and without additional data collection for age verification.
• Influencer marketing: Uniform rules across Europe, with responsibility lying with whoever has editorial control over the content.
• Self-regulation: Proven bodies such as the Austrian Advertising Council should be strengthened.

In the association’s view, cookie banners should be addressed in the EU’s ongoing Digital Omnibus process rather than in the DFA.

German Publishers “Appalled”

The criticism is even sharper in Germany. The publishers’ associations BDZV and MVFP say new information requirements and bans on successful subscription models would hurt the digital business of the press. “We are appalled that the Commission is once again not improving the journalistic and economic conditions for the free press, but significantly worsening them,” the associations said. Resistance is also coming from e-commerce: according to EUobserver, the travel booking platform Omio warns of high compliance costs.

Consumer Advocates Want More

Consumer advocates see things very differently. “The Digital Fairness Act is a much-needed tool to give consumers back control of how much time and money they spend online,” said Agustín Reyna, director general of the European consumer organization BEUC. Existing laws such as the DSA and the AI Act have too narrow a scope, he argued, and advertising should always be labeled. The European Parliament and the Council should “stand firm” behind the proposal’s objective.

For the digital rights organization European Digital Rights (EDRi), the draft does not go far enough. The fact that addictive features such as autoplay are not banned but only have to be switchable “leaves significant uncertainty” and potentially lengthy case-by-case assessments, said EDRi policy advisor Itxaso Domínguez de Olazábal. Offering an opt-out should not automatically be considered sufficient. Ahead of the proposal, more than 200 civil society organizations had called for an ambitious DFA in an open letter.

Nothing has been decided yet. The European Parliament and the member states now have to deal with the proposal, and reaching an agreement could take months or even years. Experts do not expect the rules to apply before the end of 2028.