Harmful Online Choice Architecture: ASA criticises Nike and Sky for “dark pattern” tactics

The question

What must businesses do to ensure that their ads do not fall foul of the ASA and CMA’s ongoing investigations into harmful choice architecture and dark pattern tactics?

The key takeaway

It is vital that businesses ensure that their ads conform to the CAP Code and the Digital Markets, Competition and Consumers Act 2024 (DMCCA) to avoid scrutiny by the Advertising Standards Authority (ASA) and Competition and Market Authority (CMA). This includes clear communication of pricing, product limitations and subscription terms, avoiding misleading design practices that exploit consumer trust.

The background

On 25 September 2024, the ASA issued rulings against Sky UK Ltd (NOW TV), and Nike Retail BV (Nike) for employing “dark pattern” tactics in their online ad campaigns.

• NOW TV: the ads failed to make clear that additional free trials bundled with memberships would auto-renew unless cancelled, with terms displayed in less prominent fonts and colours.
• Nike: ads commissioned by The Sole Supplier promoted discounted children’s trainers as though the offer applied to adult sizes, misleading consumers about the product’s value.

See our previous Snapshots Autumn 2024 article on online choice architecture rulings.

The development

The ASA’s rulings highlighted the following key principles:

Now TV

• Ads must specify whether a paid subscription will begin automatically after a free trial and display renewal costs prominently.
• Information about auto-renewal should be immediately visible and follow the most prominent reference to the free trial. Poor placement, such as smaller fonts in subdued colours, can result in a breach.

Nike

• Omitting or obscuring material information, such as size restrictions or pricing conditions, is considered misleading.
• The use of language and emojis implying significant discounts without clarification about product limitations (eg available sizes) violates transparency rules.

Why is this important?

In a discussion paper published in April 2022, the CMA explored how online choice architecture can be exploited to hide information from consumers and distort consumer behaviour. Dark pattern tactics are a subset of harmful online choice architecture. The Organisation for Economic Co-Operation and Development (OECD) provided examples of these practices, including:

• misleading urgency (eg false countdown timers or “only 1 left!” prompts)
• drip pricing (revealing additional fees late in the transaction)
• obscured cancellation options and terms for subscriptions.

The DMCCA strengthens regulatory powers, enabling the CMA to address harmful practices in areas such as subscription transparency, hidden fees, and price manipulation. Whilst the DMCCA received Royal Assent on 24 May 2024 and is now being implemented in stages, its implications will significantly impact businesses’ online marketing strategies. See our previous Snapshots Summer 2024 article on the DMCCA.

Any practical tips?

Businesses utilising online choice architecture in their ads must ensure that they are in full compliance with the CAP Code and the DMCCA and should:

• ensure transparency: (a) use clear, prominent language to communicate key terms such as pricing, size restrictions, and subscription renewals; and (b) highlight financial commitments associated with free trials, especially auto-renewal charges
• prepare for the DMCCA: monitor updates on secondary legislation and the CMA’s enforcement guidance, ensuring systems are in place to adapt to new requirements, as discussed in our previous Snapshots Autumn 2024 article
• improve design standards: material information should be set out in a clear font of a reasonable size and colour and be located sufficiently close to the offer
• supervise third-party advertisers: approve all third-party ads to ensure compliance with regulations and avoid reputational damage, and
• conduct internal audits: regularly review marketing practices for compliance and consult legal experts to identify potential breaches.

Winter 2024