Highlighting the increasing regulatory focus on paid subscription cancellation, the Federal Trade Commission has taken action against Care.com, alleging that the company systematically deceived users as to the wages and jobs information they could access on Care.com, and failed to provide a simple method for users to cancel their paid memberships. As part of its settlement, Care has agreed to pay $8.5 million to the FTC.
The Federal Trade Commission (“FTC”) has filed a complaint against Doxo, Inc. (“Doxo”), a bill payment company, and its co-founders, alleging that the company utilized misleading ads to imitate consumers’ billers, as well as deceptive practices to mislead consumers into paying millions of dollars in junk fees. As demonstrated by this latest enforcement action, the FTC is continuing to focus on manipulative marketing techniques known as “dark patterns.” This should serve as a reminder to marketers that the use of such practices may result in enforcement actions.
Chair of the firm's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group Andrew Lustigman will speak on the panel “Shining a Light on ‘Dark Patterns’: What All Companies Must Know About this Rising Area of FTC Advertising Enforcement” as part of ACI’s 7th Annual Legal, Regulatory, and Compliance Forum on Advertising Claims Substantiation on February 9, 2024, at 9:45 a.m. The panel will explore how the Federal Trade Commission (FTC) and other enforcers are rapidly increasing their focus on “dark patterns” in advertisement designs, which are practices that regulators believe can trick or manipulate consumers into buying products or giving up their privacy. In addition, the Commission also just released a new proposed rule governing subscription offerings/negative options. Topics to be considered will include: specific website design and advertising practices that are currently triggering enforcement activity; the types of allegations being brought by the FTC in cases where dark advertising patterns are alleged; how companies can avoid being the next target in this rising wave of deceptive advertising enforcement; restoring your product’s reputation after it falls prey to a dark pattern; and the FTC’s latest amendments to the rules governing subscription offerings/negative options and junk fees.
Alleged “dark patterns” now in play in at least four separate actions
Last year, this blog reported about Dorobiala v. Amazon.com, a private class action pending in federal court in the Western District of Washington against Amazon over the "dark patterns” Amazon used to hamper consumers from canceling their subscriptions to the Amazon Prime program. As described in a recent blog post, the Federal Trade Commission (“FTC”) upped the ante in June by filing suit against Amazon in the same court.
Meanwhile, not only is Dorobiala is still pending, there are at least two other ...
* Taylor Lodise is a law clerk in the Litigation practice group.
On November 9, 2022, amidst ongoing investigations by the FTC regarding “dark patterns” that Amazon allegedly employed to discourage subscribers from canceling their Amazon Prime memberships, a class-action lawsuit named Amazon as a defendant. The lawsuit was filed in United States District Court for the Western District of Washington and is styled Dorobiala v. Amazon.com, Inc.
Dark patterns, an increasingly popular ecommerce marketing technique, seek to encourage users to make a particular purchasing decision. They are also the subject of increasing regulatory scrutiny, including the FTC’s ABC Mouse enforcement action.