GER: Dark Patterns in Trading Apps Are Illegal

Jan 13, 2023 Benn-Ibler Rechtsanwälte

The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, hereinafter BaFin) has recently clarified on its website that the use of so-called dark patterns is not permitted.

Dark patterns are features in apps or on websites that are designed in such a way that they are less noticeable than other types of buttons. For example, such buttons have a much lower contrast, are faded, or transparent. Dark patterns are commonly known, for example, from cookie settings. These manipulative designs appeal to users below their conscious perception threshold. Decisions are made intuitively and without reflection. Even if user are aware of this, they cannot completely avoid the effect of being pushed in a certain direction when making a decision.

The use of so-called dark patterns by investment services companies in trading portals or trading apps is misleading and dishonest and therefore prohibited in connection with investment services or ancillary services under Section 63 para 6 sentence 1 WpHG (Wertpapierhandelsgesetz, German Securities Trading Act) which prohibits misleading and dishonest practices, according to BaFin. The same should also apply if buttons for relevant and important decision options are simply unavailable. Such practices are unacceptable in the securities business.

When reviewing trading apps, it became apparent that the cancel button for a transaction was often barely visible or not available at all. In contrast, the conclude transaction button was designed in a strikingly conspicuous shape. According to BaFin, it is illegal to display buttons that, for example, trigger a service associated with costs in such a way that they are more conspicuous than others. Nevertheless, it is important that equivalent alternatives, such as the cancel button, are neither displayed less conspicuously nor are completely missing. In its recent online notification, BaFin called on investment service companies to review their online presence. Specific companies concerned will be informed promptly about dark patterns in trading apps already identified by BaFin.

BaFin Notification 21 November 2022