EU threatens significant fines for unfair online trade practices

The European Commission has proposed a new Digital Fairness Act (DFA) law that could impose fines up to 6% of a company's annual global turnover for unfair online trade practices. Companies engaging in digital trade tactics to increase sales or target children with personalized ads could face these significant penalties. EU Justice Commissioner Michael McGrath emphasized that the proposed law aims to ensure businesses compete based on the merits of their offerings rather than exploiting consumers or circumventing regulations. He stated that the aim is not to make business harder but to prevent unfair business practices.

The DFA seeks to strengthen consumer protection by granting individuals more rights, although it has faced criticism from some businesses due to perceived overlaps with existing legislation and a focus on child safety online. The proposed legislation targets several issues, including "dark patterns" - deceptive user interface designs, addictive product features, misleading influencer marketing, aggressive pricing strategies, and subscription traps that have cost consumers billions of euros annually.

The law will require approval from European Union nations and the European Parliament before it can be enacted.