REU, Alm.del - 2022-23 (2. samling) - Bilag 174: Kopi af orienteringsnotat om regeringens svar på EuropaKommissionens evaluering af EU’s forbrugerlovgivning samt regeringens høringssvar til Kommissionen, fra justitsministeren

Retsudvalget 2022-23 (2. samling)
REU Alm.del Bilag 174
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Date: May 1. 2023 Annex 1.

Retsudvalget 2022-23 (2. samling)

REU Alm.del - Bilag 174

Offentligt

Annex 1

Recommendations for the Unfair Commercial Practices Directive (UCPD)

Date: May 1. 2023

The Danish government would like to give its recommendations on how the UCPD can be altered

in order to protect consumers´ interests and provide them with a basis for making informed choices

and furthermore make it more manageable for enforcement authorities to enforce the rules in an

increasingly digitalised environment.

Addressing digital asymmetry

Digital asymmetry occurs when a consumer is at a disadvantage, because the trader controls and

shapes the digital environment in which the consumer operates, presumably often without the con-

sumer having concrete knowledge of the underlying mechanisms. When engaging with the digital

environment created by the trader the consumer gives access to detailed data, which allows the trader

to develop a personal profile on the consumer including registering decision-making biases and

preferences.

When traders use online choice architecture to control the arrangement of options and the decision-

making format affecting consumers’ behaviour and decisions

problems can arise. The trader can

adopt personalised persuasion practices that serve as a form of manipulation of the consumer by i.e.

obscuring available choices, or burden the exercise of choice. Traders can also make adjustments to

their digital environment to improve the effectiveness of their practices through e.g. A/B testing.

The issues arising from this will most likely only be exacerbated with the increasing data collection

combined with machine learning and other AI techniques. Ultimately this can lead to consumers not

having enough transparency and control over the extent to which they wish to be the subjects of

personalised practices, and make it difficult for authorities to enforce the existing rules. We therefore

encourage the Commission to look into whether it would be necessary to supplement the existing

rules, such as GDPR and ePrivacy, as well as the coming AI Act, with targeted and easily enforce-

able rules in consumer law.

The Commission could also look into, whether the largest traders or their third-party suppliers

should be obliged to provide more transparency on internal tests (e.g. A/B tests) for authorities and

researchers.

The Danish government finds that digital asymmetry and personalized persuasion practices should

be addressed in the UCPD in a number of ways. The following sections will address this through

these topics:

UCPD needs to address future challenges presented by AI

Revise the concept of the average consumer

Test and prove that transparency requirements are efficient

Right to reset data generated personalized commercials

Revise the definition of a transactional decision

Clarify

the concept of “undue influence” as an aggressive commercial practice and how it

applies to digital asymmetry and personalized persuasion practices

Apply a fairness by design obligation

REU, Alm.del - 2022-23 (2. samling) - Bilag 174: Kopi af orienteringsnotat om regeringens svar på EuropaKommissionens evaluering af EU’s forbrugerlovgivning samt regeringens høringssvar til Kommissionen, fra justitsministeren

Reverse the burden of proof

Prohibit specific practices in the blacklist in Annex I

UCPD needs to address future challenges presented by AI

The digital commercial environments will continue to develop and new challenges will arise. The

Danish government encourages the Commission to look into new digital trends in order to ensure

the coming alteration of the UCPD will capture new and coming harmful commercial practices.

There has been a boom in AI research and applications in recent years and the development will

continue. Today and in the coming years, Europeans will be faced with new trends, such as Virtual

Reality and AI generated content, that can greatly impact the way that businesses interact with con-

sumers, and how consumers navigate markets. Artificial and Virtual Reality (AR/VR) is expected

to increase in prominence over the coming years, with concepts such as the Metaverse proposing to

make it the new normal for digital interactions. Virtual reality promises to create more immersive

experiences, with novel ways to influence consumers. There is a need to examine whether the al-

ready established rights for the consumer as well as the upcoming AI Act will address these new

domains appropriately.

While these technologies have the potential to increase consumer welfare, they also pose a number

of risks to consumers. While some uses of AI make companies better at something they already do

(eg. predicting consumer behavior), others seem to open up new domains. An example is the emer-

gence of generative AI (such as language and image models), which promises to radically reduces

the time and effort required to produce real-looking content, though not necessarily accurate content.

This could increase the risk of consumers being misled, either by intention or accident. As the de-

velopment of these technologies continues to speed up, it is important to make sure that they do not

come at the expense of consumers, and therefore transparency is needed as proposed in the AI Act.

The Danish Government encourages the Commission to continue to look into how new trends in the

area of AI and new commercial practices can be covered by the UCPD or other relevant legislation.

Recommendations:

•

The Commission should look into whether new trends in AI such as AI generated con-

tent in relation to i.e. commercial fraud, is adequately covered by the proposed AI Act

or should be specifically covered by the UCPD.

Revise the concept of the average consumer

The Danish government recommends that the normative image of the “the average consumer” under

EU law needs to be revisited. The definition of the average consumer as a reasonably critical person,

as stated in the Commissions guidelines to the directive, is not fit for purpose in the digital sphere

as new technologies have enabled digital asymmetries to occur, when consumers engage with traders

online.

Consumers can be subject to permanent profiling, complex manipulation and automated decisions.

In the digital consumer-trader

relationship, the trader has access to the consumer’s detailed personal

profile including decision-making biases and pressure points and can use this in a commercial con-

text. This makes the consumer vulnerable, which needs to be reflected in the level of protection

afforded.

The Danish Government encourages the Commission to look into and further analyse, how the con-

cept of the average consumer can be evolved. The Commission should look into expanding the non-

exhaustive characteristic of the average consumer by altering the definition to contain whether the

consumer has been exposed to emotional appeals, social constellations such as framing, reference

prices etc. which may, and often do lead the consumer to deviate from normal decision-making. The

definition of an average consumer should thus be changed to reflect actual decision making pro-

cesses, including biases and heuristics that often lead to non-rational behavior. Businesses should

be expected to design information and purchasing environments that do not mislead the consumer

in that context.

A way forward could be to appoint an expert panel to research and discuss the future framework of

the average consumer, especially in light of the fact that it is a term used across consumer protection

legislation. Further, in order for courts and judges to apply the term of an average consumer in the

digital sphere, it should be stated clearly in the UCPD that empirical evidence, where such exists,

should be given a special status as evidence. Finally, it is of great importance that the definition of

average consumer is identical across the consumer legislation in the EU.

Recommendations:

•

The concept of the average consumer should be revised in order to capture the actual

decision-making process in the digital sphere.

Transparency requirements should be tested and proven efficient

Following the Danish government’s considerations

on the concept of the “average consumer” a

closer look is also needed on the effectiveness of transparency requirements.

Providing consumers with relevant information about products and purchase conditions as well as

privacy settings and the use of AI tools serves a good purpose. However, in practice these well-

meant intentions are not always adequately reaching the consumer in a helpful manner. This is in

part due to behavioural factors, such as limited attention, inaction and overconfidence on the con-

sumers part for example due to an overload of information. It can also be a result of traders hiding

or obscuring information by for example presenting the information in a small, subdued font or by

using ambiguous terminology. Particularly, more vulnerable groups are less likely to benefit from

the advantages offered by the provided information.

Disclosure and transparency measures can therefore prove insufficient and regulatory solutions

should rely less on the consumers’ willingness and ability

to inform themselves but rather place the

responsibility on traders to ensure salience and transparency. See more on this in the section below

regarding fairness by design.

In general, the Commission should be cautious about introducing new transparency requirements.

When transparency requirements are considered, these requirements should be thoroughly tested

and proven effective in addressing the matter at hand. Furthermore, it would be beneficial if the

Commission were to evaluate existing transparency requirements in the same manner, in order to

identify inefficient and unnecessary requirements that burdens companies and contribute to infor-

mation overload for the consumers.

Recommendations:

•

Transparency requirements should be tested and proven efficient before introduced to

law.

Right to reset data generated personalized commercials

Today the rules in the GDPR and E-privacy directive allows consumers to control cookie-generated

commercial content by disagreeing to accept commercial cookies on websites and by deleting the

cookies in their browser. However, in regard to personalized commercial content on social medias,

consumers do not have a legal right to avoid or reset content that is generated on the basis of data

collected. By introducing a reset button in relation to social media content, the consumer would have

the option to reset his or her historical personal account data

–

such as clicks and likes and tracking

–

which are used to deliver personalized commercials and content

–

without having to reset or delete

account-settings, such as connections. Thus after a reset request the social media platform would

only be able to use data collected after the reset request was made to create personalized commer-

cials. The right to reset could be manifested in a salient reset button. We encourage the Commission

to investigate the effect of such a reset-button, for instance in collaboration with the larger social

media platforms, to reach the most effective solutions for the consumers.

Recommendations:

•

Consumers should have the right to avoid and reset personalized commercial content

that is generated on the basis of data collected.

The definition of transactional decision

The Danish Government encourages the Commission to revise the scope of transactional decision

in the directive.

At the heart of consumer protection is the protection from loss of autonomy. Retention mechanisms

that influence consumers to spend excessive time on platforms, decrease the likelihood that consum-

ers make a decision on whether to continue or discontinue to use the service should be clearly cov-

ered by the UCPD.

Design practices that automatically load and displays additional content without requiring the user

to specifically request it or precompile it, like i.e.

infinite scroll

and

auto-play

on social media and

similar mechanisms can cause unwanted time-loss as it eliminates natural decision points. Similarly,

mechanisms that reward users for uploading content or sharing messages can make users spend more

time on platforms than they would have otherwise. Recommended content can, however, also en-

hance the user experience and lead consumers to discover new content within their fields of interest.

However, when the consumer is offered new content without the choice to easily opt out of exposure,

the practice could be considered to be an issue of undue influence. This is particularly true, when it

comes to children, who do not have the same skills to manage their time and interaction with plat-

forms.

The Danish government finds that retention mechanisms should be addressed in the UCPD by re-

vising the scope of

“transactional decision”

and the understanding of the

“economic behaviour of

the consumer”

as defined in the guidelines to ensure clarity and to make the concept more opera-

tional for enforcement agencies.

The UCPDs concept of ‘transactional decision’ should be broadened and the wording adapted to

reflect all cases where the behaviour of the consumer is connected to the revenue-earning model of

the trader. This can be done by extending the understanding of economic behaviour and transactional

decision of the consumer to include situations where transactional value is built on the user’s en-

gagement with the digital choice environment. This will be the case, when the undertakings revenue

is generated on the

basis of the length and level of activity of the consumer’s engagement rather than

the consumer being involved in a purchasing process.

This is especially relevant when the trader is a social media platform, as they usually provide unpaid

access for consumers but monetize consumer interactions with the platform (e.g., exposure to ads

and other content, scrolling the feed, sharing, liking). In short, they make money through grapping,

retaining and utilizing consumer attention, and any application on their part that materially distorts

attention is therefore transactional per default. The fact that the consumer is not in a purchase-related

situation does not alter this, as the consumer is in actuality paying with their attention, engagement,

activity and behavioural data and allowing the platform to sell advertising space to other traders for

exposure to the consumer. Consequently, commercial practices which distort the consumer’s deci-

sion-making in this context should also be treated as a material distortion of economic behaviour

and this be seen as an unfair practice under the UCPD. In revising the UCPD, the Danish government

encourages the Commission to look at including harms such as time loss and addiction, when de-

scribing the negative distortion of the consumer behavior.

Recommendations:

•

Revise the scope of transactional decision and economic behaviour of the consumer as

defined in the guidelines to the directive in order to address retention mechanisms.

Aggressive commercial practices and the concept

of “undue influence”

Unfair commercial practices are sometimes applied simultaneously. Many websites and apps use

several dark patterns at the same time. They can therefore, when used in combination, make it hard

to distinguish the effects of a

consumers’ decisions

from a single individual practice. This can exac-

erbate the undue influence on consumers and complicate enforcement, which is often based on a

practice-by-practice investigation.

In order to address the effects of harmful online choice architecture the Commission should examine

“structural undue influence” and circumstances such as the

online choice architecture, the technical

infrastructure, and the degree of informational asymmetries when establishing whether a practice

‘significantly impairs or is likely to significantly impair the conduct of the consumer’, causing them

to ‘take a transactional decision they would not have taken otherwise’.

The guidance states that “certain commercial practices in games, including

embedded advertise-

ments, could amount to an aggressive practice under Articles 8-9 UCPD. This may be the case if the

practices involve the use of behavioural biases or manipulative elements relating to, e.g. the timing

of offers within the gameplay (e.g. offering micro-transactions during critical moments in the game),

pervasive nagging or the use of visual and acoustic effects to put undue pressure on the player.”

Recommendations:

•

The Commission should examine structural undue influence in order to ensure the

rules are fit for purpose to establish whether a practice significantly impair or is likely

to impair the conduct of the consumer.

Apply a fairness by design obligation

The scope of the UCPD is quite broad. It applies to all commercial practices that occur before, during

and after a business-to-consumer transaction has taken place. The decision to enter for instance an

e-commerce site can fall under its remit, even if a user does not buy a product or a service and can

also apply after a transaction has been completed. Accordingly, every user interface that either

pushes consumers into agreeing to terms and conditions or indicating consent could fall under its

scope.

Art. 5 of the UCPD requires traders to exhibit “professional diligence”. According to the guidance

the notion of “professional diligence” encompasses principles such as honest and good market prac-

tice and good faith. Consequently, traders must follow those principles, when designing their online

interface through which they will interact with consumers.

The Danish government finds that the reflections on the professional diligence duty on user interface

design in the guidance should be clearly reflected directly in the UCPD. This could be done by either

expanding the scope of art. 5 in the UCPD or by drafting a new obligation entirely.

A fairness by design obligation could require traders to design interfaces that clearly hinders con-

sumer welfare-reducing choices. This would mostly be done by obscuring information that is choice-

enhancing. At a minimum it should extend to a requirement for traders to not feature any manipula-

tive online choice architecture or deceptive designs, which might mislead or influence users through

website interfaces.

Such an approach could take inspiration from the GDPR’s requirements for data protection to be

“by design and by default” (Art. 25). It would

be adamant for the enforceability of the duty of fair-

ness that it be applicable in its own right and not just as a supplement to the violation of an existing

prohibition such as those in art. 6-9 in the UCPD.

Recommendations:

•

The Commission should look into either expanding the scope of article 5 on professional

diligence or introduce a new obligation on fairness by design.

Reverse the burden of proof

The UCPD must reflect that digital asymmetry also affects enforcers. Pinpointing unlawful behav-

iour is made more difficult as authorities can have trouble identifying a single transactional moment

for examination. Lengthy and resource-consuming investigations can be very difficult from an evi-

dence perspective and enforcement authorities can have a hard time keeping up with platforms that

are constantly updating and making use of new online choice architecture.

The Danish government therefore encourage the Commission to look into, whether certain practices

should be subject to a reversal of burden of proof. In this examination the Commission should par-

ticularly explore practices that are an expression of digital asymmetry, which materially distorts the

decision-making autonomy of the consumer.

Recommendations:

•

It should be considered to introduce a reversed burden of proof regarding online choice

architecture that raises issues of digital asymmetry.

Expand the blacklist

The Danish government recommends that the UCPD introduces new prohibitions for specific prac-

tices concerning deceptive design, manipulative online choice architecture and aggressive personal-

ised persuasion techniques, which in our experiences always are to the detriment of the consumer.

Many of these practices are already unlawful, but by listing them in the blacklist it will be easier for

the authorities to enforce the existing rules.

The Danish government recommends that the blacklist in Annex I of the UCPD include the follow-

ing practices:

1. Recommending products without making the objective parameters for the recommendation

available to the consumer at the point of purchase.

2. Personalising prices without informing consumers in a salient manner about the fact that the

price is personalized.

3. Adding new and potentially significant non-optional charges to the total price when a consumer

is about to complete a purchase (Drip pricing).

4. Sneaking

an item into a consumer’s basket without consent e.g. via a checkbox on a prior page.

5. Transitioning the consumer from a free or reduced-price trial period, at the point of expiration

without

the consumer’s explicit consent (subscription

traps).

6. Displaying a discounted price with reference to an original misleading or false higher price

(misleading reference pricing).

7. Using ambiguity with trick questions (e.g. double negatives).

8. Manipulating the consumer toward a particular choice through emotive language or framing

(confirmshaming).

9. Revising No 7, so it explicitly prohibits countdown timers on websites regardless of, whether it

is a reflection of falsity or not.

The Danish government further recommends that the Commission look into, which specific com-

mercial practices relating to the following issues could be part of the blacklist in Annex I of the

UCPD:

1. Algorithmic exploitation of natural decision-making biases to the detriment of the consumer.

The Commission can look at this issue in coherence with the proposed requirement in the AI

Act.

2. Making it hard to opt out of privacy-intrusive settings rather than to make privacy-friendly set-

tings. This could be analysed in conjunction with the ePrivacy rules and the GDPR.

3. Creating different lengths of click paths online to different options in order to steer consumers

to choose the path preferred by the business to the detriment of the consumer (click fatigue).

4. Preselection of payment options and preselection to opt-in on newsletters by default.

5. Self-preferencing, where the online platform gives visual precedence to options favourable to

the business thus creating a false hierarchy. This ought to be analysed in conjunction with the

similar ban in the DMA.

Recommendations:

•

Assessment of a need for new prohibitions on specific practices concerning deceptive de-

sign, manipulative online choice architecture and aggressive personalised persuasion tech-

niques.

Influencer marketing

–

visually salient standardized commercial disclosures on social media

The Danish government recommend to introduce an obligation on visually salient standardized com-

mercial disclosures on social media. Influencers are increasingly sharing commercial content, i.e.

collaborating with companies to promote products through f.i. unboxing videos or by incorporating

promotions of products into their natural content, etc. The mix of social and commercial user-gen-

erated content can cause consumers to be misled, if they fail to notice that the content is sponsored

or paid for by a specific trader.

A study conducted by The Danish Competition and Consumer Authority in 2021

found that both

children and adult consumers have difficulties in recognizing when content on social media is com-

mercial. The study shows that only around 50 pct. of the consumers are able to correctly identify

influencer advisements on social media with the current disclosure obligations as stated in article 6

and 7 of the UCPD. The study further shows, that a prominent and standardized commercial disclo-

sure improves the commercial awareness significantly. Consumers will thus benefit from visually

salient standardized commercial disclosures on social media. Further, evidence shows that the same

effects will appear for online market platforms, such as booking platforms. If commercial content is

labelled in a uniform manner on the individual platforms, more consumers can identify the paid

content and separate it from the natural content

–

and it does not seem to influence consumer choices,

it merely makes it more transparent.

Standardization should, however, not be harmonized across

platforms in general, but only across the individual platform because salience and thus effectiveness

of the label will depend on the design of individual platform.

With the recent adoption of the Digital Services Act (DSA), large providers of online platforms

must ensure that recipients of the service in a clear and unambiguous manner and in real time are

able to identify whether the content is commercial (article 26 and the correspondent article 44),

including through prominent markings. The UCPD specifies that prohibitions against hidden mar-

keting are particularly relevant when it comes to social media platforms, because the distinction

between third party traders and social media users at times can appear blurred to the consumer.

Further, article 5(3) of the UCPD reinforces the general requirement to clearly indicate the marketing

purpose, when the content is targeted children.

Consumers benefit from visually salient standardized commercial disclosures on social media (kfst.dk)

clear-and-intuitive-disclosures-58.pdf (kfst.dk)

To ensure that the DSA and UCPD complement each other, the Danish government recommends

the UCPD article 5, 6 and 7 to contain requirements for more visually and salient disclosure forms.

All commercial content on online platforms should be marked using a standardized commercial

disclosure provided by the platforms. A standardized commercial disclosure should not be the same

across platforms, but what is important is a standardization on the individual platform, such that

consumers only have to familiarize themselves with one salient type of disclosure on the platform

they are using.

Recommendations:

•

The Commission should introduce an obligation on visually salient standardized com-

mercial disclosures on social media, correspondent to the requirement in the DSA.

Value of in-app and in-game currencies must be displayed in real currency

The Danish government finds there is a need to address in-app and in-game currencies in the di-

rective by requiring businesses to display in-app currencies in real currencies.

Paying with coins and tokens can disconnect consumers from the awareness that they are spending

actual money. Subsequently consumers can have a hard time with converting the actual value and

price of items in the game. Moreover, these effects are reinforced in cases where multiple in-game

currency is used by the same game. On top of this, there are several factors, which can lead to

overspending on the part of the consumer. Firstly, in-game and in-app purchases often take the form

of micro-transactions, constituting small amounts, which lies within a threshold that consumers are

quick to accept and forget about. Hence micro-transactions are designed in a way that makes it

possible for consumers to accumulate large spending within an app or a game without being much

aware of this. Furthermore, as different games and platforms use different exchange rates for their

currency against the relevant real currency it can be difficult for consumers to keep track of the

cumulative spending, as some sites might have coins with the value calculated in euros, where an-

other game might have tokens that are presented in US dollars. The issues arising from this are

further exacerbated when games offer currency-bundles. When the player is a child or young person

comprehension is even less customary.

The Danish government recommends a requirement in the UCPD, as stated in the guidelines, that

the real value of in-app purchases and in-game currencies must be displayed in real currency and in

a clear and salient manner in the context of the transaction. Further, the real value should be dis-

played in the currency of the country, where the player in question is established or entering the

game from combined with a requirement to show the consumer accumulated spending when offering

consumers new purchases.

However, in order to ensure better protection of children and ease the oversight for enforcers it

should be considered to introduce a prohibition on in-app and in-game currencies, when games can

be accessed by children. This would effectively also mean setting requirement for age-verification.

In the same vein the issue of age-verification and what constitutes effective age barriers could be

further dealt with in the UCPD. The UCPD guidance states that the check to determine whether a

commercial practice falls under point 28 of Annex I must be carried out taking into account all the

facts and circumstances of an individual case including the presence of age-restrictions and taking

account of the steps that the trader has taken in protecting minors from direct exhortation.

Recommendations:

•

Require in-game and in-app currencies to be displayed in real value currencies, includ-

ing in the real currency of the country of the player.

•

Consider addressing the issue of effective age-restrictions in relation to the assessment

under annex 1 point 28.

Regulate harmful loot box designs in the UCPD

The Danish government expresses concern for the harmful nature of certain loot boxes and find there

is a need to look into whether there should be a prohibition on specific harmful commercial practices

related to loot boxes, where monetary transactions are involved. Loot boxes have many of the same

characteristics as used in gambling. Prizes are distributed randomly, the values of prizes are variable

and players are provided with uncertainty, which keeps players going. For this reason there are con-

cerns that loot boxes in gaming can serve as a gateway to gambling. Several EU member states are

looking into national legislation. Since the gaming sector is cross boarder by nature, there is a need

for a clear and harmonized approach to avoid fragmentation.

Some of the online persuasive techniques used by games trigger addictive responses in consumers.

Furthermore, opaque offer and pricing techniques could cause unwanted or uncontrolled spending

on loot boxes. This is further exacerbated by the fact that the consumer is not always attentive to the

long-term cost of purchasing loot boxes through small in-game micro-transactions (as mentioned

above), until players are already financially and psychologically committed in the game.

The Danish government believes that the current disclosure requirements does not sufficiently mit-

igate the various risks to consumers in relation to the deceptive designs and the aggressive marketing

practices that are connected to the use of loot boxes

in today’s gaming environment. Although,

the

UCPD guidance in large focus on disclosure requirements in loot boxes, especially disclosure around

probability and the real costs of in-game currency, there is, however, a lack of evidence with regards

to the extent to which transparency and information requirement achieve their goal of protecting

players from harmful effects. This is partly due to the timing of disclosure, as the information needs

to be provided at the right time, in the right format and to the right audience. For example, the effects

of disclosing the probabilities of winning can be expected to be marginal, if they are provided on

the publisher's website. Consequently, the Danish government believes that it is necessary to evalu-

ate the effectiveness of current disclosure mechanism related to loot boxes.

Further, the Danish Government encourages the Commission to look into the prohibition of certain

persuasive designs and harmful practices in relation to children as regards to loot boxes, such as

near misses

that have strong relations to gambling and

personalized timing of in-game offerings

loot boxes as some games target loot boxes more aggressively to the users that are already spending

more than average in vulnerable or pressured situations.

Even though many games with loot boxes are not specifically targeted at children, children still

engage with them. This is problematic as children can be more vulnerable to problematic game

designs compared to adults and children have a reduced ability to exert self-control and more diffi-

culties in understanding valuation and probabilities in games. The Danish government believes that

the internet should be a safe space for children and minors and easy for them to navigate within. The

impact on children as regards methods used for commercial purposes such as persuasive designs in

games, e.g. loot boxes, need to be studied more and handled upon. So far point 28 of Annex I and

Article 5(3) in the UCPD have not sufficiently protected children from the harms loot boxes.

In relation hereto the limits of Annex I, point 28 should be further clarified as regards to how

“direct

exhortation”

to children to buy advertised products should be understood in relation to loot boxes.

The guidance states that

“point

No 28 of Annex I and Article 5(3) UCPD prescribe that games tar-

geted at children, or which traders can reasonably foresee to be likely to appeal to children, must not

contain direct exhortations to children to buy additional in-game items.” It could from this be argued

that loot boxes in games that are accessible to children would already be covered by point 28. How-

ever, it is often hard to distinguish marketing directed at children from marketing directed at con-

sumers in general. It would therefore be beneficial, if the Commission clarify, as to which extent

loot boxes are covered by Annex I point 28, when they occur in games that are accessible to play by

children.

It should further be clarified, whether the prohibition in Annex I point 20 on falsely describing a

product as free would cover games, where the consumer cannot without making in-game purchases,

access content integral to gameplay or play the game in a way that a consumer would reasonably

expect, given the information provided up-front. If this is the case, it should be made clear in the

UCPD and the concept of “integral to gameplay” should be clarified in the guidelines.

Recommendations:

•

Need to evaluate the effectiveness of current disclosure mechanism as relates to loot

boxes.

•

Examine whether there is a need to prohibit certain persuasive designs and harmful

practices as regards to loot boxes, such as

near misses

and

personalized timing of in-

game offerings

of loot boxes.

•

The impact on children as regards methods used for commercial purposes such as per-

suasive designs in games, e.g. loot boxes, should be examined more in depth. Clarify

whether the current black list point 28 on direct exhortation to children to buy adver-

tised products should be understood in relation to loot boxes.

•

Clarify whether the current black list point 20 on falsely describing products as free

cover games.

Extend the application of consumer law beyond traders to third-party facilitators

The Danish government encourages the Commission to consider if the scope of the UCPD should

cover third parties facilitators that enable traders to deploy misleading practices or persuasive tech-

niques on their digital sales environments. Such third party facilitators can be providers of online

platforms, including online marketplaces, online marketing companies or other business-to-business

suppliers of software or services. For example, online marketplaces may facilitate use of fake dis-

counts and personalised pricing. In examining whether introducing legal liability for third parties

the Commission should consider the possible gained effect on unfair practices.

Recommendations:

•

Consider extending the scope of the UCPD to cover third-party facilitators, such as

online marketplace providers and software suppliers, that facilitate deployment of mis-

leading practices or persuasive techniques in their digital sales environments.