by Jamie Rubin

Within days of the FTC announcing a lawsuit against Amazon over its subscription practices for Prime - alleging a history of dark patterns - yesterday the FTC announced a proposed settlement with Publishers Clearinghouse (PCH) over allegations that PCH employed dark patterns in its user interface to get people to pay to enter sweepstakes. PCH denies any wrongdoing. The settlement requires PCH to pay a hefty fine ($18.5 million in consumer refunds) and revise its user interface to avoid the impression that a purchase is required to enter a sweepstakes or that a purchase will increase the odds of winning a sweepstakes.

According to the FTC, PCH’s user interface conflates ordering products and entering sweepstakes - PCH’s sweepstakes entry process includes pages of ads (including for magazine subscriptions) before the entrants can actually complete their free entry. Sweepstakes laws throughout the United States are clear that sweepstakes sponsors must not require a person to purchase a product in order to enter a sweepstakes. That is why most sponsors offer alternate free ways to enter sweepstakes. Otherwise, the sponsor is offering an illegal lottery in violation of state and federal law. But even if a sponsor makes a free method of entry available, it cannot construct the entry process to confuse the entrant into thinking they must make a purchase or that doing so will make it more likely they will win.

There are other important allegations and results in this case. Notably, under the proposed settlement, PCH would have to delete all consumer data that was collected before January 1, 2019. This part of the proposed settlement arises out of allegations that, prior to January 1, 2019, PCH sold or shared user data in contravention of its privacy policy.

Despite PCH denying the allegations, this case presents a further wake up call that companies need to take a hard look at their user interfaces with an eye toward elements that could confuse consumers. 

Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.