Shedding Light on Dark Patterns: Clever Marketing or Unfair Trading Practice?

Overview

If you’ve browsed online sales events, tried to unsubscribe from a subscription service or put something in an online shopping cart but not completed a purchase, the chances are you’ve come across “dark patterns”. A dark pattern is a manipulative design strategy used in e-commerce to trick, sway or distort consumer choice. According to a 2024 review by the International Consumer Protection and Enforcement Network, 76% of websites and mobile apps worldwide employ at least one dark pattern.

Dark patterns have been in the headlights of the regulator, the Australian Competition & Consumer Commission (ACCC) in 2023 and 2024, with several high-profile enforcement actions against e-commerce businesses. Despite this, there is no specific prohibition on dark patterns under Australian law, meaning enforcement is only possible when the use of dark patterns is egregious enough to meet the “misleading or deceptive” or “unconscionable” thresholds under the existing provisions of the Australian Consumer Law.

In response to a consultation on the Australian Consumer Law in late 2023, a number of industry stakeholders submitted that the Australian Consumer Law in its current form is not fit for purpose to protect consumers from (among other things) the harms of dark patterns. On 15 November 2024, Treasury published its consultation paper on the Government’s proposal to prohibit unfair trading practices under the Australian Consumer Law.

This article looks at the proposed reforms and to what extent they will ban the use of dark patterns in online trading, and what businesses who sell goods or services online can do to ensure they are prepared.

What are dark patterns?

The term ‘dark patterns’ was first coined in 2010 by UK web designer and academic Dr Harry Brignull to describe manipulative online design strategies that lead users to making decisions which may be against their best interests. This could include, for example, involuntary or automatic subscriptions (also known as ‘subscription traps’), complex processes to cancel services, ‘nudging’ of customers to influence their decisions, and methods that generate a false impression of limited availability or time-sensitive discounts.

Common examples of dark patterns include:

Automatic renewal	Services or memberships that make it difficult to unsubscribe or automatically subscribe users at the end of a free-trial period.
Hidden fees	Unexpected costs during the checkout process, often called drip-pricing.
Trick questions	Confusing prompts when attempting to cancel a service or the use of double negatives.
Scarcity cues	Fake countdown timers and stock levels to create urgency.
Unnecessary data capture	Forcing users to create unnecessary online accounts or consent to cookies.
Confirm shaming	Offering discounts in a way that pressures users into purchasing or subscribing.
Disguised advertisements	Articles designed to look like genuine content or search results on a website that instead redirect to a product or service.
False hierarchy	Websites or apps prioritising certain products based on user profiles, to funnel users toward specific purchases.
Activity notifications	Misleading notifications about other users’ activities.

The Fair Trading NSW website has more information about some of the common types of dark patterns.

The current legal landscape

There is no specific prohibition on dark patterns under Australian law, meaning whether they are legal depends on the specific action involved and whether it breaches an existing provision of the Australian Consumer Law.

Currently, the Australian Consumer Law has:

Standards-based Provisions which establish principles that apply generally across circumstances and industries. These include prohibitions against:

• unconscionable conduct (section 21(4)(a));
• misleading or deceptive conduct (section 18); and
• unfair contract terms (part 2‑3).

Specific Provisions which establish clear offences for defined behaviours such as:

• false or misleading representations, for example about the price of goods (section 29);
• bait advertising (section 35);
• pyramid Schemes (sections 44 – 47); and
• advertising goods or services in component parts instead of as a single figure (section 48).

In 2023, the Australian Government initiated a public consultation to address unfair trading practices, including dark patterns. The consultation was led by the Commonwealth, state, and territory consumer ministers, and aimed to gather evidence on the nature and extent of unfair trading practices that are not currently prohibited by the Australian Consumer Law.

Several industry stakeholders participating in the consultation suggested that the existing provisions of the Australian Consumer Law were outdated and insufficient to tackle dark patterns. These stakeholders highlighted that current laws did not cover practices such as hidden fees, misleading urgency tactics, and complex cancellation processes, which can harm consumers and small businesses.

Australian Consumer Law reform: unfair trading practices

On 15 November 2024, Treasury released its consultation paper on the Australian Government’s proposed design of unfair trading practices prohibitions.

If enacted, the proposed reforms would create a general prohibition on conduct which:

• unreasonably distorts or manipulates consumer decision-making; and
• causes, or is likely to cause, material detriment to consumers.

The Government has outlined a non-exhaustive preliminary ‘grey list’ of practices that could meet the above test, which includes:

• the omission of material information;
• the provision of material information to a consumer in an unclear, unintelligible, ambiguous or untimely manner, including the provision of information in a manner that overwhelms, or is likely to overwhelm, a consumer;
• impeding the ability of a consumer to exercise their contractual or other legal rights (for example, requiring a consumer to provide irrelevant information to access a benefit they are entitled to or not providing a reasonably accessible contact point for customer service or complaints); and
• use of design elements in online consumer interfaces that unduly pressure, obstruct or undermine a consumer in making an economic decision (i.e. dark patterns).

Additionally, the Government is seeking feedback on and considering specific prohibitions and reforms on unfair trading practices which include:

• Prohibiting certain subscription practices: reform options include pre-sale disclosure of key information, a notification requirement, opt-in consent and removal of barriers to cancelling subscriptions;
• Drip pricing: further reforming Australian Consumer Law to better address extra fees during the purchasing process especially when combined with scarcity cues and count-down timers;
• Dynamic pricing: a specific prohibition on increasing price during the purchasing process;
• Online account requirements: prohibiting online retailers from forcing customers to create accounts and disclose personal information which can lead to unnecessary data sharing and unwanted marketing. The Government is seeking feedback on whether a mandatory ‘guest’ checkout option should be an amendment item; and
• Barriers to accessing customer support: introducing a consumer guarantee or obligation on businesses to provide a point of contact for general customer support.

Depending on the final form of legislation (expected in 2025), it’s likely that that the new general prohibition on unfair trading practices would capture most common dark patterns, in particular false scarcity cues, false hierarchy and confirm shaming. In other words, online design practices used to trick users (as opposed to legitimate marketing tactics) would likely fall afoul of the new general prohibition. Further, it seems likely that specific prohibitions will be introduced that prohibit or limit the use of misleading subscription practices, hidden fees, dynamic pricing and unnecessary customer data collection.

Bird & Bird will continue to monitor these legislative developments as they progress.

How businesses should prepare

Review and revise marketing practices	Businesses should audit their current online marketing strategies to identify any dark patterns, such as misleading urgency tactics or hidden fees, which might unreasonably manipulate consumers against their interests.
Simplify cancellation processes	Make it straightforward for customers to cancel subscriptions or services without unnecessary hurdles.
Be cautious using generative AI	Generative AI frequently replicates these dark patterns due to the extent to which they are embedded in training data scraped from the web. As such, any businesses that utilise generative AI in their marketing, web design or e-commerce processes should be careful to ensure they are not inadvertently using dark patterns.

This article was written with the assistance of Gianluca Pecora.