The National Association of Attorneys General’s biennial consumer protection conference always provides a fascinating dive into the minds and priorities of the state attorney general’s consumer protection staff and leaders who direct investigations and day-to-day disputes that have the most direct impact on businesses. The May 24, 2022 meeting in Raleigh, North Carolina, attended by representatives from 42 states, DC and four territories, was no exception.
The second panel of the day was moderated by Iowa Deputy AG for Public Protection Jessica Whitney and focused on emerging issues involving so-called “dark patterns” and whether they constitute deceptive or unfair business practices. The term “dark models” was developed to characterize the ways companies design and refine online user interfaces and other marketing practices to “exploit cognitive biases” and influence consumer choice. With participation from Jennifer Rimm of the DC AG office, Elizabeth Kwok of the FTC, and Mihir Kshirsagar of Princeton University, the speakers identified various dark corporate practices that should be of concern to regulators, such as:
- make it easy to subscribe to a service but very difficult to unsubscribe from it;
- restrict the choices available to consumers;
- manipulate information and disclosures to conceal details and prohibit informed choice;
- restrict or distort consumers’ control over information collected about them;
- “nagging” tactics to burn consumers out; and
- misrepresentation of scarcity and bandwagon effects.
Ms. Rimm cited a number of cases brought by the DC AG office investigating the use of dark models, while noting that these cases often involved hidden fees, subscription and negative option fees, and /or collecting consumer data without consent. Other speakers referred to the work being done by regulators in Europe and Australia and by the OECD to develop standards and best practices around dark models.
According to the panelists, US regulators can combat these practices by drawing on their traditional authority over unfair and deceptive trade practices at the state and federal level; however, at least one panelist acknowledged that distinguishing between improper coercion and legitimate persuasion will continue to be a challenge for regulators and courts. Panelists encouraged GA staff to capture A/B testing data during their surveys and carefully craft their data requests to ensure they capture all relevant iterations of a user interface.
Exercise caution when performing A/B testing
Speaking to the industry, panelists explained how companies often make decisions about their user interfaces by using “A/B testing” to assess how minor interface tweaks – like changing the color of buttons choice or placing important information in hyperlinks – can have an impact on the consumer. behavior and thus increase sales. Panelists voiced important takeaways for businesses:
- Be careful when deploying A/B testing as an outcome-based strategy to maximize conversion rates or optimize company profits, as it may be considered illegal deceptive conduct.
- Consider ethical design when creating or modifying marketing and user interfaces. Websites with customer experience features that deviate significantly from other comparable websites raise red flags.
- To avoid scrutiny from the AG (and the FTC), focus on transparency for consumers, informed consent, and parity in the registration and cancellation processes. According to the FTC, it should be as easy for the consumer to cancel a service as it is to sign up.
- Businesses dealing with children should be especially careful because their audience’s cognitive ability to avoid manipulation is not fully developed and there are additional legal protections for children.
- Be responsive to consumers and their complaints, not only by responding to the complaint itself, but by acting on the feedback the company receives about user experiences.
To learn more about other panels at the NAAG Spring Consumer Protection Conference 2022, go here:
A view from above: MAs on their role in consumer protection (Part 1 of 4)
Countdown to Hits – Top Consumer Complaints (Part 3 of 4)
Meeting of the Minds – AG State Settlements Negotiation (Part 4 of 4)