By: Chris Allen, Meghan Stoppel, and Ann-Marie Luciano

The National Association of Attorneys General’s biennial Consumer Protection Conference always provides a fascinating deep dive into the minds and priorities of state attorney general consumer protection staff, and of the leaders who run the day-to-day investigations and litigations that most directly impact companies.  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 hosted by Iowa’s Deputy AG for Public Protection, Jessica Whitney, and focused on the emerging issues involving so-called “dark patterns,” and whether they constitute deceptive or unfair trade practices. The term “dark patterns” was a developed to characterize ways in which companies design and refine online user interfaces and other marketing practices to “exploit cognitive biases” and influence consumer choice.  With participation by Jennifer Rimm of the DC AG’s office, Elizabeth Kwok of the FTC, and Mihir Kshirsagar of Princeton University, the speakers identified various dark pattern practices of businesses that should give regulators concern, such as:

• making it easy to opt into a service but very difficult to opt out;
• restricting the choices available to consumers;
• manipulating information and disclosures to conceal details and prohibit informed choice;
• restricting or misrepresenting consumer control over the information collected about them;
• “nagging” tactics to wear down consumers; and
• misrepresenting false scarcity and bandwagon effects.

Ms. Rimm cited to a number of cases brought by the DC AG’s office investigating the use of dark patterns, while noting that those cases often involved hidden fees, subscription and negative option fees, and/or the collection of consumer data without consent.  Other speakers referred to work being done by regulators in Europe and Australia and by the OECD to develop standards and best practices surrounding dark patterns.

According to the panelists, US regulators can address these practices by relying on their traditional unfair and deceptive trade practice authority at both the state and federal level; however at least one panelist acknowledged that delineating improper coercion from legitimate persuasion will continue to be a challenge for regulators and the courts. The panelists encouraged AG staff to capture A/B testing data during their investigations, and to craft their data requests carefully to ensure they are capturing all relevant iterations of a user interface.

Exercise Caution When Conducting A/B Testing

Speaking to industry, the panelists discussed how companies often make decisions regarding their user interfaces by using “A/B testing” to evaluate how minor changes to the interface – like changing the color of choice buttons or placing important information in hyperlinks – can impact consumer behavior and thereby increase sales.  The panelists expressed important takeaways for businesses:

• Use caution when deploying A/B testing as an outcome-based strategy to maximize conversion rates or otherwise optimize company profits as this can be viewed as unlawful deceptive conduct.
• Consider ethical design when crafting or changing marketing and user interfaces. Websites with consumer experience features that dramatically depart from other comparable websites raise red flags.
• To avoid AG (and FTC) scrutiny, focus on transparency to consumers, informed consent, and parity in enrollment and cancellation processes. According to the FTC, it should be just as easy for the consumer to cancel a service as it is to sign up.
• Those companies dealing with children should be especially careful, since 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 is receiving about user experiences.

To read about the other panels at the 2022 NAAG Spring Consumer Protection Conference, go here:

A View from the Top:  AGs on Their Consumer Protection Role (Part 1 of 4)

Counting Down the Hits – Top Consumer Complaints (Part 3 of 4)

Meeting of the Minds – Negotiating State AG Settlements (Part 4 of 4)