Companies found guilty of using unfair digital trade practices to push people to buy more or target children with personalised advertising risk fines of as much as 6% of annual global turnover, according to a European Commission draft law seen by Reuters on Monday.

Source: Reuters

The proposed legislation, known as the Digital Fairness Act (DFA), will be presented on Wednesday by the Commission's justice chief, Michael McGrath, Reuters reported. It will need to be thrashed out with EU countries and the European Parliament before it can become law — so nothing in the draft is final yet.

What the draft would ban

The draft would ban so-called business-to-consumer “dark patterns” — deceptive or manipulative interface designs on websites and apps that steer people into buying more — as unfair commercial practices, the document seen by Reuters said. Agence Europe, which also saw the draft on Monday, reported that the DFA repeals and replaces the Unfair Commercial Practices Directive of 2005, folding its content into a directly applicable EU regulation, and that it addresses influencer marketing, unfair personalisation, addictive design and dynamic pricing.

Source: Agence Europe

Reporting on the leaked draft by Euronews, summarised on Monday, added further proposed details: a fixed list of practices that would always count as unfair, Europe's first consumer rules for AI shopping agents, and a right for adults to disable chatbot features that simulate personal relationships. Those details come from pre-release draft reporting and could change before Wednesday's presentation.

How the fines would work

Under the draft, the Commission could impose fines not exceeding 6% of a trader's worldwide annual turnover for widespread, cross-border (“intra-Union”) infringements, Agence Europe reported, while member states would have to provide for fines with a ceiling of at least 4% of annual turnover in the countries concerned. The same 6%-of-global-turnover scale is the one the EU already uses in its biggest digital enforcement laws.

Why Brussels says it is needed

The DFA is the latest legislative push by Europe to make Big Tech, e-commerce and social media giants do more to police how their platforms sell to consumers, Reuters reported. Euronews' summary of the Commission's impact assessment put the consumer financial losses the law aims to avoid at €88.4 billion (yaani roughly 88 arab euros — about 8,840 crore euros in South Asian counting) between 2025 and 2035, with a further €13.7 billion a year counted in time lost to unfair practices, against recurring business compliance costs of about €678 million a year. Those are the Commission's own assessment figures, reported from the draft, not independent estimates.

Who it reaches — including sellers outside Europe

Because the fines are calculated on worldwide turnover and the rules govern selling to EU consumers, the Act would reach any company — American tech giants, Chinese e-commerce platforms, or an independent web store run from India, Canada or Britain — that sells online into the EU and uses the banned designs or advertising practices. Traders who do not sell into the EU would not be directly affected.

What happens next

McGrath presents the proposal on Wednesday. It then goes to negotiation between the European Parliament and the EU's 27 member states, a process that typically takes many months and often changes penalty levels and definitions. Draft reporting suggests the rules would take effect 12 months after adoption, if agreed. Until then, the 6% headline is a draft ceiling — the number to watch is what survives the negotiations.