On June 26, the FTC
filed a
complaint against a sweepstakes company alleging they used “dark patterns” (via the use of “manipulative phrasing and website design”) to trick consumers into purchasing products in order to enter the increase the chances of winning the company’s sweepstakes. The FTC further claimed the defendant engaged in other unlawful practices in violation of the FTC Act, including (i) failing to disclose the true price of goods and failing to inform consumers they were responsible for return shipping costs for unwanted products; (ii) misleading consumers with fictitious email subject lines; and (iii) sharing consumer data with third parties despite disclosing in its privacy policy prior to January 2019 that it did sell or rent consumer data to third parties.
Under the terms of the proposed court order filed June 27 stipulating to an injunction, monetary judgement, and other relief, the defendant would be required to pay $18.5 million in monetary relief and make numerous changes to its email and internet operations. Among other things, the defendant would be required to clearly and conspicuously disclose on every shopping page that a purchase is not required to enter a sweepstakes and that purchasing will not help a consumer win. Consumers would also be required, in many cases, to acknowledge this disclosure when responding to a call to action that results in an order. The defendant must also clearly disclose material costs and terms of purchase, as well as any additional fees, and cancellation and return policies. Additionally, the defendant would be required to delete all consumer data collected prior to January 1, 2019, unless required for processing transactions, and stop misrepresenting its data collection and sharing practices.
