EU Draft Aims to Regulate Addictive Design and AI Chatbots, Violators May Face 6% Revenue Fines

On November 10, multiple media outlets reported on the draft of the "Digital Fairness Act" which shows that the European Commission intends to require companies to allow users to disable features that induce compulsive or excessive use, and to regulate AI systems that extend interactions by simulating interpersonal relationships. The draft is expected to be published on November 11, and companies that violate the regulations may face fines of up to 6% of their global annual revenue. The draft requires that adult users be given the option to disable autoplay, notifications unrelated to their activities, and continuous reward systems; if an AI chatbot encourages ongoing interaction by simulating interpersonal relationships, users should also have the right to disable such features.

The draft also proposes to list 10 types of manipulative designs that are considered unfair under any circumstances, including making it significantly harder to cancel services than to register, hiding prices or automatic renewal terms, falsely implying that there are no other choices, making false or inadequately qualified claims about supply or popularity, repeatedly emphasizing scarcity at checkout, pre-selecting additional products or quantities, framing refusal as a wrong choice, repeatedly asking to change a decision already made, using confusing double negatives, and fabricating notifications that someone has contacted the user. The European Commission may add new manipulative practices to the list without restarting the legislative process.

Additionally, the draft proposes that online subscriptions provide a clear contract termination button, that consumer consent must be obtained before free trials convert to paid services, and that reminders must be sent before automatic renewals; for minors, it proposes to ban paid loot boxes and paid win mechanisms in video games. Impact assessments estimate that the relevant regulations will help consumers avoid economic losses of €88.4 billion between 2025 and 2035; when accounting for time lost, annual benefits are expected to be €13.7 billion, with total annual compliance costs for businesses estimated at €678 million. The draft still needs to be reviewed by the European Parliament and member states, and according to the current text, it will apply 12 months after coming into effect. The German government expressed opposition in mid-October, advocating for amendments to the existing consumer protection directive rather than creating a new law.