Recent Developments in KFTC’s Efforts to Regulate Dark Patterns

On April 21, 2023, the Korea Fair Trade Commission (“KFTC”) issued a press release on the Policy Direction for Protecting Consumers from Online Dark Patterns (the “Plan”). This was the first major announcement on dark patterns by the KFTC since declaring in its 2023 Enforcement Plan (published on January 26), reflecting the need to prepare effective regulatory measures against dark patterns as an enforcement priority for this year. The Plan, which reaffirms the KFTC’s determination to strictly regulate dark patterns, reveals how the KFTC classifies dark patterns into specific types of conduct and how it plans to regulate each of those types going forward.

1. Classification of Types of Dark Patterns and Assessment of Need for Regulation of Each Type

It is necessary for the KFTC to clarify how the conduct generally known as “dark patterns” could be regulated under Article 21, Paragraph (1), Item 1 of the Consumer Protection in E-Commerce Transactions Act (“E-Commerce Act”), which prohibits companies from “providing false or exaggerated information or using deceptive means to solicit customers, engage in transactions with consumers, or prevent consumers from cancelling orders.”

The Plan accordingly (i) classifies dark patterns into specific types, (ii) assesses the need for regulation for each type, and (iii) explains how the KFTC plans to enforce those regulations. Under four major categories of defrauding, misleading, obstructive and pressuring dark patterns, the Plan identifies 19 specific types of conduct: seven of which require full regulation as they are deemed to cause significant consumer harm; six types that also require regulation but only under limited circumstances; and the remaining six types for which the KFTC found little need for regulation.

Further, of the 13 types that require either full or limited regulation, the Plan distinguishes between those that require enactment of additional legislation and those that can be regulated under the current E-Commerce Act. Key details of the 13 types requiring regulation are as follows.

Dark Patterns Requiring Full Regulation (Seven Types)

Category	Type	Description	Need for Additional Legislation
Defrauding	Hidden renewals	Without notifying consumers, renewing their service agreements when such renewal would result in transitioning free services to fee-based services or charging of higher fees	Yes
Misleading	False discounts	Displaying false information on discounts to induce consumers to purchase products at higher prices	No
	False recommendations	Deleting negative consumer reviews or creating fake positive reviews	No
	Bait and switch	Posting content that falsely advertises the sale of products that are not available for sale as “bait” to lure consumers	No
	Disguised advertisements	Providing consumers with content that do not appear as advertisements, but are in fact advertisements in disguise (e.g., deceptive adverting)	No
	Trick questions	Asking consumers questions that trick them into making unintended replies or choices, or that require significant attention to detail to properly understand the question (e.g., double-barreled questions, double negatives, vague questions)	No
Obstructive	Hidden information	Concealing, downplaying or omitting important information that is necessary for making informed purchasing decisions as a means to solicit consumers or engage in transactions with consumers	No

Dark Patterns Requiring Limited Regulation (Six Types)

Category	Type	Description	Scope of Regulation	Need for Additional Legislation
Defrauding	Gradual disclosure of costs	Intentionally displaying a low price on the first search results page, then gradually revealing hidden costs as the consumer proceeds to make the purchase, and ultimately charging a higher price that includes the hidden costs	Exceptionally allow gradual disclosure of costs when it is difficult to list the total amount to be paid on the search results page (e.g., when the price changes depending on the options selected)	Yes
Misleading	False hierarchies	Using a visually conspicuous design to highlight options that are unfavorable to consumers or favorable to the company, thereby misleading consumers to believe that those are the only options available or that their selection is required	Limit regulations to when consumers need to make decisions that could lead to additional charges, e.g., for purchasing products, entering into or canceling agreements Limit regulations to when there is a concern that the visually conspicuous difference (e.g., in size, shape, color) could mislead consumers into thinking that there is a hierarchy among the listed options or that selection of the highlighted options are necessary to make a purchase	Yes
Misleading	Pre-selection of purchase options	Pre-select options that are favorable to the company in an inconspicuous manner and induce consumers to inadvertently accept those options without noticing	Limit regulations to pre-selection of options confirming consent to purchase a product or service, which could likely lead to unexpected payments	Yes
Obstructive	Obstruction of cancellation or withdrawal	Prevent consumers from freely cancelling orders, terminating an agreement or cancelling membership by restricting such process or making it more complicated than the process for placing orders, entering an agreement, or joining membership	Exceptionally allow imposition of a more complicated process when there is a justifiable reason for doing so (e.g., to check information necessary for settlement of payments)	Yes
Obstructive	Obstruction of price comparison	Conduct that makes it difficult to compare prices or sales conditions of various products	Limit regulations to when displaying prices of different products, without a justifiable reason, by using different units (e.g., size, number of item, bundles) to make it difficult to compare prices	No
Pressuring	Repeated interference	Pressing consumers to perform a specific action by repeatedly urging them, e.g., through pop-up notifications, to perform that action	Limit regulations to when repeated demands to consumers to change their decision are made within a short amount of time Exceptionally allow repeated interference when consumers are given the choice to opt out of receiving such notices for a specific duration (e.g., clicking on a box that says “Do Not Show This Notification For One Week”)	Yes

2. Future Direction of KFTC’s Efforts to Regulate Dark Patterns

For the six types of conduct that are difficult to regulate under existing laws (i.e., hidden renewals, gradual disclosure of costs, false hierarchies, pre-selection of purchase options, obstruction of cancellation or withdrawal, and repeated interference), the KFTC is expected to actively support discussions at the National Assembly (“NA”) for necessary legislation to expand the scope of regulation. Key details of anticipated efforts by the KFTC are as follows.

(1) Amendments to the E-Commerce Act Expanding the Scope of Regulation

The KFTC is expected to work on amending the E-Commerce Act so that it can cover the six types of conduct that require regulation but are difficult to regulate under current law.

On April 20, a day before the Plan was released, a bill was proposed to the NA to amend the E-Commerce Act. As the bill aims to establish a legal basis for regulating those six types of conduct, it will be necessary to closely monitor future developments as the bill goes through the legislative process. Notably, the bill proposes to newly impose the following obligations and prohibitions on e-commerce companies:

A.	Obligation to notify consumers when charging a higher amount or transitioning from free to fee-based services.
B.	Obligation to make visible to consumers the total amount to be paid when making purchases.
C.	Prohibition of not notifying consumers of the total amount to be paid when making purchases, (e.g., notifying only a part of the total amount to be paid).
D.	Prohibition of asking consumers, without prompting, during the purchase process for a certain product, whether they want to purchase a different product, thereby inducing them to agree to purchase another product.
E.	Prohibition of inducing consumers to select a certain option by making that option visually conspicuous (e.g., in size, shape, color) among other listed options.
F.	Prohibition of obstructing a consumer from cancelling orders, terminating agreements, or cancelling membership.
G.	Prohibition of repeated pop-up notifications asking if the consumer wants to change the options they have selected.

(2) Proactive Enforcement of Law Against Dark Patterns

According to the press release, the KFTC and the Korea Consumer Agency have launched a survey on dark patterns in major e-commerce industries, and the KFTC plans to work closely with consumer groups to conduct related surveys in the second half of this year.

Through the surveys, the KFTC is expected to learn more about dark pattern marketing schemes used by major e-commerce companies and proactively enforce the law against those that fail to correct problematic conduct detected during the surveys. In particular, with regards to the seven types of conduct that can be regulated under existing law, the KFTC has stated that it will proactively enforce the law regardless of amendment efforts. It will therefore be necessary to closely monitor developments at the KFTC regarding the surveys and the results when they are announced, and other related regulatory movements.

(3) New Guidelines for Preventing Harm Caused by Online Dark Patterns

The KFTC also noted that within the first half of this year, it will explain the types of dark patterns that were confirmed to be in need of regulation immediately and start enforcing a new set of Guidelines to Prevent Harm Caused by Online Dark Patterns, which is expected to serve as the KFTC’s standards for regulating dark patterns.

In light of these developments, companies are advised at this time to conduct a thorough inspection of their e-commerce business websites or mobile apps to see if there are any dark patterns mentioned above, especially those types that the KFTC emphasizes are in need of regulation, and take preemptive measures to minimize the chances of misleading consumers.

[Korean Version]

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