On April 21, 2023, the Korea Fair Trade Commission (the “KFTC”) issued a press release on the Policy Direction for Protecting Consumers from Online Dark Patterns (hereby referred to as the “Plan”).
While the KFTC has recently reaffirmed its determination to regulate “dark patterns,” there has been a lack of clear policy guidance on what conduct constitutes “dark patterns” under the broad language of Article 21 Paragraph (1), Item 1 of the Act On The Consumer Protection In Electronic Commerce (the “E-Commerce Act”), which prohibits companies from “luring customers, concluding a deal with consumers, or interfering with customers’ cancellation, etc. of orders or termination of contracts by providing false or exaggerated information or by deceptive means.”
The Plan provides policy guidance by (i) categorizing dark patterns into specific types, (ii) assessing the regulatory need of each type, and (iii) setting out appropriate regulatory measures to be implemented.
1. Categorization of Dark Patterns and Assessment of Regulatory Need
The Plan classifies dark patterns into four major categories – Defrauding, Misleading, Obstructing, and Pressuring patterns, which are further subdivided into 19 specific pattern types. Among these, seven types are deemed to cause significant harm to consumers and require full regulation, while the other six types require regulation only under limited circumstances. Finally, the KFTC identifies six types for which it finds little need for regulation. Of the 13 types that require some degree of regulation, the Plan distinguishes between those that require the enactment of additional legislation and those that can be regulated under the current E-Commerce Act.
Key details regarding the 13 pattern types requiring regulation are as follows:
Dark Patterns Requiring Full Regulation (Seven Types)
Category |
Type |
Description |
Need for Additional Legislation |
Defrauding |
Hidden renewals |
Renewing service agreements without notifying consumers, when such renewal would result in the transitioning of free services to fee-based services or 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 contents that do not appear as advertisements, but are in fact advertisements in disguise (e.g., deceptive advertising) |
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 (e.g., double-barreled questions, double negatives, vague questions) |
No |
|
Obstructing |
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 |
|
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 |
|
Yes |
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 |
|
Yes |
|
Obstructing |
Obstruction of cancellation or withdrawal |
Prevent consumers from freely cancelling orders, terminating an agreement or cancelling a membership by restricting such processes or making it more complicated than the process for placing orders, entering an agreement, or joining membership |
|
Yes |
Obstruction of price comparison |
Conduct that makes it difficult to compare the prices or sales conditions of various products |
|
No |
|
Pressuring |
Repeated interference |
Pressing consumers to perform a specific action by repeatedly urging them, through methods such as pop-up notifications, to perform that action |
|
Yes |
2. Future Direction of KFTC’s Efforts to Regulate Dark Patterns
In addition to specifying its regulatory framework on dark patterns through this Plan, the KFTC is expected to actively support discussions for further legislation at the National Assembly in an attempt to expand the scope of regulation to cover the six pattern types that are difficult to regulate under the current law.
(1) Expansion of the Scope of Regulations through Amendments to the E-Commerce Act
The KFTC is expected to work on amending the E-Commerce Act to ensure that it can cover the six types of conduct that require regulation but are difficult to regulate under the current law (i.e., hidden renewals, gradual disclosure of costs, false hierarchies, pre-selection of purchase options, obstruction of cancellation or withdrawal, and repeated interference).
(2) Proactive Enforcement Against Dark Patterns
As part of its policy announcement, the KFTC announced that it had launched a joint survey with the Korea Consumer Agency on dark patterns in major e-commerce industries, and that it plans to work closely with consumer groups to conduct related surveys in the third and fourth quarters of 2023 as well.
Through these surveys, the KFTC will be able to learn more about the dark pattern marketing schemes used by major e-commerce companies and proactively enforce the law against those that fail to rectify problematic conduct identified during the surveys. In particular, with regards to the seven types of conduct that can be regulated under the existing law, the KFTC has stated that it will assertively enforce the current iteration of the law, independent of any amendment efforts.
(3) New Guidelines for Preventing Harm Caused by Dark Patterns
The KFTC also noted that within the first half of this year, it will explain the types of dark patterns requiring high levels of regulation and establish a new set of Guidelines to Prevent Harm Caused by Dark Patterns. The new Guidelines are expected to serve as the KFTC’s standards for regulating dark patterns moving forward.
The Plan marks the first major and concrete step by the KFTC in addressing dark patterns since declaring in its 2023 Enforcement Plan (published on January 26) the need to prepare effective regulatory measures against dark patterns as an enforcement priority for this year. The Plan not only reaffirms the KFTC’s determination to strictly regulate dark patterns but also outlines a concrete action plan on how it plans to regulate each specific type of conduct categorized in the Plan.
For businesses operating e-commerce websites or mobile apps, it will be important to conduct a thorough review of their existing platforms to see if there are any dark patterns that the KFTC emphasizes as requiring regulation, take preemptive measures to minimize the chances of misleading consumers, and keep up to date with legislative movements relating to the E-Commerce Act amendments.
Related Topics
#Dark Patterns #KFTC #Antitrust & Competition #2023 Issue 2 #Newsletter