Latest Developments in Online Safety, Online Consumer Protection and More

This year promises to be a busy year in consumer law and digital regulation. While nearly a quarter of the year has already passed, much more is still to come, particularly in areas of law and regulation that are arguably overdue for attention. The law is notoriously slow at keeping up with (and, therefore, successfully regulating) the latest developments in technology, particularly that which is consumer-facing. The areas discussed below have become increasingly concerning over the past several years from a consumer point of view, so what might we expect to see this year?

Online Safety Bill

The Online Safety Bill (“the Bill”), first published in draft form back in May 2021, is designed to protect users (both adults and children) online, making social media companies more responsible for the safety of users on their platforms.

Keeping children and young people safe online has become increasingly important given both the proliferation of potentially harmful content online and the rapid rise over the past decade or so of children with ready access to online platforms through smartphones and tablets. The Bill intends to protect children by requiring platforms to:

• Quickly remove illegal content or prevent it from appearing in the first place. This includes content that promotes self-harm.
• Prevent children from accessing harmful and age-inappropriate content.
• Enforce age limits and age-verification methods.
• Ensure that risks and dangers to children on the largest social media platforms are more transparent, including through the publication of risk assessments.
• Provide parents and children with clear and accessible means to report problems online.

The Bill also protects adults in three specific ways through what the Government calls a “triple shield”. Platforms will be required to:

• Remove all illegal content.
• Remove content that is prohibited by their own terms and conditions.
• Provide adult users with tools enabling them to tailor the type(s) of content that they see, allowing them to avoid potentially harmful content if they do not wish to see it. Children should be automatically prevented from seeing such content without having to change any settings.

The Bill specifies a range of content that will be covered including illegal content and harmful content. Illegal content includes:

• child sexual abuse;
• controlling or coercive behaviour;
• extreme sexual violence;
• fraud;
• hate crime;
• inciting violence;
• illegal immigration and people smuggling;
• promoting or facilitating suicide;
• promoting self-harm;
• revenge porn;
• selling illegal drugs or weapons;
• sexual exploitation; and
• terrorism.

Harmful content includes that which is not illegal but could be harmful or age-inappropriate:

• pornographic content;
• online abuse, cyberbullying, or online harassment; and
• content that does not meet a criminal level but which promotes or glorifies suicide, self-harm, or eating disorders.

Other key aims of the Bill include keeping underage children off social media, giving people more control over the content that the see, and tackling repeat offenders.

Ofcom will be the regulator responsible for enforcing the Bill and will be empowered to check measures implemented by platforms to meet their obligations under it. Ofcom will also have powers to take action against platforms that do not comply with their new duties. Fines will be up to £18m or 10% of annual global turnover, whichever is greater, and criminal action may be taken against senior managers who fail to follow information requests from Ofcom. In some extreme cases, Ofcom may also require payment providers, advertisers, and ISPs from working with a site.

The Bill will affect all companies whose platforms are accessible to UK users, regardless of where they are based. One might suggest that Twitter, in particular, take a look inward at its now-dismantled Trust and Safety Council and cutbacks to other trust and safety teams. Certainly for those companies offering their services to UK users, now is not the time to be taking a laissez-faire approach to user safety.

At present, the Bill is at the committee stage in the House of Lords. So far, the Bill’s passage has been far from trouble-free, with a number of amendments made along the way. According to the timetable, the Bill should receive Royal Assent in April 2023, but some commentators have expressed their doubts as to whether this is still achievable.

Subscription Traps

Beyond the Online Safety Bill, a number of other online issues are in the sights of regulators this year. One of those issues is that of subscription traps. A subscription trap typically starts out as a free trial or reduced-price offer for some form of product or service and is often advertised online. If the consumer doesn’t cancel the trial within a specified period, they are automatically transferred onto a subscription plan.

One of the key problems with subscription traps is the absence of clear and prominent terms and conditions. Important information is often hidden or at least made difficult for the casual user to find. Consequently, many subscription trap agreements may already be in breach of the Contract (Information, Cancellation and Additional Charges) Regulations 2013 and the consumer Protection from Unfair Trading Practices Regulations 2008.

Consumer law reforms in this area will focus on specific legal obligations on businesses selling products and services on subscription, requiring them to provide mandatory pre-contract information, send reminder emails to customers before contracts auto-renew, and ensure that customers are given a straightforward, cost effective, and timely way of terminating the subscription contract.

Even with more regulation in this area on the horizon, now is an ideal time to review your current practices if you sell your products or services on a subscription basis, particularly ensuring that consumers are kept well informed and are not “tricked” into paying subscription fees.

Dark Patterns

Related to the issue of subscription traps is the issue of so-called “dark patterns”. In essence, this concerns online choice architecture which is designed to deceive or manipulate consumers into making certain decisions that have the potential to result in consumer harm. Which Consumer Insight observes that dark patterns are ubiquitous. Common examples of dark patterns highlighted by Which include:

• Activity messages telling users what other users are doing on their website or app at that time, e.g., making purchases.
• Low stock messages designed to pressure users into making a purchase before it’s too late (whether true or not).
• High-demand messages designed to have a similar effect to low-stock messages.
• Nagging pop-ups for email list sign-ups or similar.
• False hierarchy whereby a particular option is made to stand out more.
• Confirmshaming, which refers to the act of shaming the user into opting into something. An option to decline will use shaming wording, for example, “no, I don’t want to keep my computer safe”.
• Trick questions, making it unclear as to how to opt in or out of something.
• Countdown timers (often false) indicating that a particular deal or discount will expire in a certain period of time.

The Competition and Markets Authority recently began a consumer enforcement programme focusing on online choice architecture, beginning with an investigation into Emma Sleep (a brand surely familiar to anyone who uses social media at present) and the brand’s use of countdown timers and time-limited claims to suggest greater savings than was actually the case. It is likely that more investigations into other companies will follow.

Dark patterns are also under scrutiny in other key jurisdictions. The US Federal Trade Commission recently published a report on dark patterns and a specific ban on dark patterns was recently introduced in the EU Digital Services Act.

As with subscription traps, it is a good idea to get ahead of any potential regulation or similar action on this topic by conducting a thorough review of your e-commerce practices to determine whether your use of online choice architecture is compliant with consumer protection and competition law, not to mention basic common sense and fairness.

Influencer Marketing

If you use social media or have considered marketing your products or services on social media, influencer marketing is rarely far away. What more convincing does a consumer need than a funky young personality excitedly talking up the latest in personal grooming technology or the latest mobile game and its rich variety of expensive loot boxes?

The Advertising Standards Authority is perhaps right to be concerned about this popular trend in advertising. While many influencers and other social media personalities are clear about the commercial or sponsored segments of their content, others are not. The ASA has set up a web page to name and shame the worst offenders in this area and has begun targeting certain influencers’ followers on social media with advertising of its own to highlight non-compliant practices. In-keeping with new technology, the ASA is also using AI to detect undisclosed commercial content and will be working more closely with online platforms to take action against it.

The CMA is also active in this area. It has reminded online platforms of their legal duty to act with professional due diligence and facilitate compliance with consumer protection law. It has also developed six key compliance principles for platforms to help them deal with hidden advertising online:

• Inform users that incentivised endorsements are required to be clearly identified as advertising and clearly distinguishable from other content.
• Provide content creators with tools to that they are easily and effectively able to label any content as advertising.
• Take appropriate, proportionate, proactive steps and use available technology to prevent hidden advertising from appearing on your site.
• Make it simple for users to report suspected hidden advertising easily and effectively.
• Facilitate legal compliance by brands.
• Enforce your terms and conditions and take appropriate action when violations occur.

This is an important topic whether your business provides an online platform for creators or whether you are (or are considering) advertising your products or services using influencer marketing. Steps should be taken now to ensure that your users and/or your ads do not mislead and that commercial or sponsored content contained within influencer content is clearly identified as such (with a segue to your sponsor, for example).

Fake Reviews

Along with some influencer marketing, sometimes a review can appear to be too good to be true. Some are easier to spot than others, but as is arguably the case with many of the issues addressed in this newsletter, the average user will not be carefully scrutinising everything that they see online when looking to buy a product or sign up to a service.

Following a consultation last year, the Government proposed amending Schedule 1 of the Consumer Protection from Unfair Trading Regulations. This Schedule sets out a list of business practices that are automatically unfair. To help deal with fake reviews, the following additions have been proposed:

• Commissioning or incentivising any person to write and/or submit a fake consumer review of goods or services.
• Hosting consumer reviews without taking reasonable and proportionate steps to check they are genuine.
• Offering or advertising to submit, commission or facilitate fake reviews.

Displaying customer reviews on your site or incorporating them into your advertising materials can be a valuable marketing tool, but they should be handled with care. It should go without saying that buying reviews and using click-farm services should be avoided at all costs. Even so, businesses should take care to monitor reviews – both good and bad – and consider ways to ensure that reviews are genuine, for example, by requiring reviewers to verify that they have made a purchase or have actually used a product or service.