Less than a week after announcing that it had filed a civil case against Amazon alleging that the company used “dark patterns” to enroll people in its Prime program, the FTC announced that it has entered into a settlement with Publishers Clearing House (PCH) to settle charges involving PCH’s use of “dark patterns.”  The proposed stipulated order requires PCH to pay $18.5 million in monetary relief and make various changes to prevent the practices that were the subject of the complaint.

On August 16, 2023, from 12:00 p.m. to 1:00 p.m. ET, Ballard Spahr will hold a webinar, “Shining a Bright Light on Digital Dark Patterns.”  Click here to register.

In its complaint, the FTC alleged that PCH used “dark patterns” in the form of manipulative phrasing and website design to convince consumers that they needed to buy a product to enter the company’s sweepstakes or increase their chances of winning.  However, unlike its complaint against Amazon in which the FTC alleges that Amazon’s use of “dark patterns” in its website design violated the prohibition of unfair acts or practices in Section 5 of the FTC Act, the FTC’s complaint against PCH alleges that PCH violated the Section 5 prohibition of deceptive acts or practices by making various misrepresentations.  Rather than alleging that PCH’s use of “dark patterns” in itself constituted a violation of Section 5, the FTC appears to be alleging that PCH use of “dark patterns” was part of an overall scheme to deceive consumers in violation of Section 5.  According to the complaint:

PCH also employs dark patterns throughout the consumer’s experience, by among other things: linking and conflating “ordering” products and “entering” the sweepstakes through trick wording and visual interference; placing disclosures in small and light font and in places where a consumer is unlikely to see them; bombarding customers with emails that pressure them to take immediate action by clicking on the email or purportedly risk losing the opportunity to enter or win the sweepstakes; and making it difficult for consumers to enter the sweepstakes without an order.

The complaint also alleges that PCH engaged in deceptive acts or practices in violation of Section 5 by misrepresenting the total cost of products or the amount of additional charges through the addition of surprise shipping and handling fees, misrepresenting that ordering is “risk free” when there is are substantial shipping costs to return products, and misrepresenting its policies on selling users’ personal data to third parties.  The complaint also alleges that PCH violated the CAN-SPAM Act by using misleading e-mail subjects.  (The CAN-SPAM Act establishes requirements for commercial e-mails.)