Japan's consumer watchdog calls for regulation of 'dark patterns' deceiving online buyers

TOKYO, Aug. 24 (Reuters) - Japan's Consumer Affairs Agency has called for stricter regulation of deceptive online practices known as "dark patterns" that trick consumers into contracts and purchases they don't fully understand, the agency said on Monday.

The panel is set to draft an interim report in the coming month on legal measures to combat such tactics, known as dark patterns, in preparation for revising the Act on Specified Commercial Transactions. Dark patterns are manipulative techniques used in website and app design to deliberately mislead consumers or steer them towards unfavorable choices.

Examples of dark patterns include misleading descriptions of services as trials that actually lead to subscriptions, and displaying false messages like "only a few left in stock" to prompt rushed purchases. The draft proposal includes rules to regulate unclear displays of key information such as payment amounts, quantities, and contract lengths, as well as displays that push for immediate contract signing and complex cancellation processes.

Businesses found guilty of violating the proposed provisions would face administrative penalties. Currently, dark patterns can only be addressed partially under existing laws like the Act on Specified Commercial Transactions and the Act against Unjustifiable Premiums and Misleading Representations.

In recent years, dark patterns have become increasingly problematic due to the surge in online transactions. A survey by the Association for Countermeasures Against Dark Patterns, a coalition of IT firms and consumer groups, estimates the annual economic damage from dark patterns could reach 3.2 trillion yen ($20.08 billion).

The issue came to the forefront recently after an online video streaming service sparked controversy over its annual contract requirement, despite appearing to offer a monthly subscription option. The company's operator apologized and discontinued new annual contracts.