Unfair trading practices in the digital sector: what startups and scale-ups should watch out for

Why this topic is so relevant to tech companies

When it comes to consumer law, many founders still think mainly of general terms and conditions, return rights and mandatory information at a checkout. But in the digital sector, the playing field is much wider. Not only does an ad or landing page count, search results, reviews, influencer posts, interface choices, pricing mechanisms, and even how a user moves through a product can also be legally relevant.

This follows from the broad and technology-neutral nature of the rules on unfair trading practices. Those rules weren't written for one type of channel or technique, but for the entire spectrum of B2C business practices. Whether a consumer is affected via a webshop, app, platform, algorithm or AI-driven interface, the legal premise remains the same: consumers must not be misled, essential information must not be omitted and unauthorized pressure should not play a role.

This is extra important for startups and scale-ups, because growth is often sought in experimentation, friction reduction and conversion optimization. What feels smart from a product or growth perspective can be problematic from a consumer law perspective. Think of a ranking that does not appear to be neutral, a review section without a clear explanation, a buy button that visually draws all the attention, or price information that gradually increases.

At Startup-Recht, we regularly see that teams still approach marketing, product and legal too much separately. That doesn't work on this topic in particular. This is because the legal assessment affects the entire customer journey, from first visibility to purchase and sometimes even the switch to a competitor.

Not only your ad, but your entire platform counts

The bar is high for online platforms and online marketplaces. The rules apply not only to traders who sell via a platform, but also to the platform itself, depending on the role that platform plays in the relationship with consumers. This is directly relevant for marketplaces, SaaS platforms with a transactional layer and app stores.

A first point of attention is transparency about the service itself. A platform must be clear about the main features of its service. This may include, for example, the scope of the offer, the timeliness of information about price and availability, and how suppliers are selected or controlled. For tech companies, that means not only looking at the information at the product level, but also at what your platform communicates as an intermediate layer.

A second point of attention is the position of third parties on your platform. If third parties sell to consumers via your environment, the layout of the platform must be such that those sellers can actually meet their own information obligations. In other words, a platform should not only facilitate conversion and ease of use, but must also offer space for identity, contact details, pricing information and additional costs. This directly affects design choices, merchant onboarding and the structure of product pages.

There is something else for online marketplaces. Consumers must be able to see exactly who they are buying from and whether that seller is a trader or another consumer. That difference is not cosmetic. It also determines whether consumers can rely on consumer protection. A marketplace that communicates unclearly about this not only runs into transparency problems, but can also give the impression of being the seller itself. This increases the liability risk.

For startups that are building a marketplace model, this is an important lesson. The dividing line between “we are just the platform” and “the consumer sees us as a seller” is determined not only legally, but also visually and communicatively. The more prominent your brand, the more central your checkout, and the more invisible the underlying seller, the greater the risk of blurring that dividing line.

Search results, reviews and influencers are not legally an afterthought

Digital businesses live on visibility. That's why search results, reviews, and influencer reach are so sensitive. What is an acquisition channel for a growth team is often a place where transparency has to be precise in consumer law.

Search results and rankings

When it comes to search results, consumers often expect the order to be arranged in a neutral or organic way. This expectation can be exceeded when certain results are higher because they have been paid for or because a commercial relationship is involved. This does not necessarily have to be prohibited, but it must be clearly known.

For platforms that let consumers search for third-party products, it is particularly important that they provide information about the most important parameters behind the ranking. Not in the form of a technical manual, but in a way that is understandable and directly accessible to consumers. Advertising in search results or paid prominent placement must also be clearly and conspicuously distinguishable from the other interface.

For startups, this is relevant as soon as ranking becomes part of the business model. As soon as merchants can pay for visibility, as soon as sponsored placements are integrated into organic results, or as soon as an algorithm takes commercial interests into account, the legal question must be addressed. Transparency should not be an afterthought.

Reviews and Recommendations

Reviews are crucial for many consumers. That is exactly why the legal attention is focused on this. It's not just about fake reviews in the classic sense, but also about how review systems are set up and presented.

Anyone who shows consumer reviews must clarify whether and how it is checked that those reviews actually come from consumers. It should also be clear whether all reviews are published or just a selection, where those reviews come from, how average scores are calculated, and whether payments or contractual relationships affect the presentation of reviews.

This is relevant for tech companies at multiple levels. If you have your own review system, you should think about verification and presentation. If you copy reviews from a third party, you won't be done automatically. Even then, transparency towards consumers remains important. In addition, not only the party that shows reviews is at risk, but also parties that make fake engagement, such as fake likes or false recommendations.

An extra sensitive point is selective presentation. Highlighting positive reviews is commercially tempting, but when negative reviews are omitted or the overall picture is presented in a misleading way, legal risk arises. For startups that focus tightly on trust signals, this is therefore not a detail, but core compliance.

Influencer marketing

Influencer marketing also requires more than just a hashtag. The commercial nature of a mail must be recognisable to consumers. At the same time, the European guidance shows that this does not always mean everything. Especially for children and young people, a post can still feel like a personal, non-commercial recommendation despite a disclosure.

For brands and scale-ups that work with creators, this means compliance doesn't stop with “add #ad”. The question is also how the expression comes across as a whole. How is the post structured? What is the relationship between personal storytelling and commercial message? And how visible is the commercial character really to the target group?

In addition, responsibility cannot lie with the influencer alone. The brand that the influencer uses can also be addressed under certain circumstances. For marketing teams, this means that creator campaigns must be properly organized not only contractually, but also in terms of content and operationally.

Dark patterns, A/B testing and data-driven marketing are directly related to consumer law

For many digital companies, the real excitement lies here. Data, experimentation and interface optimization are at the heart of modern product development. At the same time, the European approach shows that consumer law does not stop at the purchase button.

The scope of the rules is broad. Not only the final transaction counts, but also previous steps that move a consumer towards a commercial decision. In doing so, the term “decision” is approached broadly. Further scrolling, viewing ads or clicking on a link can also be part of the review.

This is relevant for teams that work with attention design, retention loops and engagement optimization. The idea that “nothing has been bought yet, so this is outside consumer law” is not easy to apply in this context.

A/B tests are not automatically neutral

In itself, A/B testing is a normal tool in product development. But once they are deployed in a way that becomes opaque and manipulative for consumers, that can change. That does not mean that testing is prohibited. However, the outcome of an experiment should not only be tested for conversion, but also for fairness.

For startups, this is an important governance question. Teams often test which color button works better, which flow leads to fewer dropouts, or which copy provides more activation. It becomes legally relevant when these variants systematically push consumers in a direction by suppressing information, weakening alternatives or artificially skewing the choice architecture.

Dark patterns are more than annoying UX

Dark patterns are approached in the guidance as built-in manipulation in digital interfaces. This may involve a violation of professional commitment, deception or even aggressive business practices.

The examples are familiar to anyone who has ever designed a conversion-driven flow. Make important information visually unclear. Strikingly design one option and eliminate the alternative. Working with trick questions or ambiguous language. Confirmshaming, where a user feels guilty if they want to quit. Pre-checked boxes. False urgency via timers or scarcity announcements. Presenting a product as free when it's actually wrong. Keep poking at a user until they accept.

For product teams, now is the time to focus on a simple question: do we direct the user, or do we manipulate them? This is not a purely moral question, but also a legal one. Especially when growth is built on onboarding flows, upsell modals, exit screens and consent interfaces.

At Startup-Recht, we see that it is precisely fast-growing tech companies that benefit from a design review with a legal lens. Not to curb creativity, but to prevent acquisition or activation choices from later leading to enforcement risks, reputational damage or costly changes to the product.

Price mechanics, games and geolocation require extra sharpness

Pricing and personalization

Online pricing offers entrepreneurs a lot of leeway. Dynamic pricing, price discrimination, and personalized pricing are not necessarily prohibited. But that space is not unlimited. Once again, the common thread is transparency.

One practice that can be immediately risky is working with rising prices during the ordering process, where unavoidable costs only come into focus later. If consumers are gradually confronted with more and more price components, this can become problematic. Especially when time pressure is also used afterwards to complete the transaction.

Dynamic prices are allowed as a starting point, provided that consumers are well informed about the total costs and how the price is determined. Price discrimination is also not automatically prohibited under this framework, although restrictions may apply in other areas. And when prices are personalized based on automated decision-making, there is a specific information obligation towards consumers.

For startups in e-commerce, mobility, tickets, subscriptions and marketplaces, this is essential. Pricing is often a growth driver, but also a compliance risk. The question is not only whether a model is commercially smart, but also whether the user understands enough what they are paying for and why.

Games and in-app purchases

For game companies and app developers with virtual items, the message is clear: transparency must remain intact, especially in playful environments. This is especially true when children and young people are an important part of the target group.

Providers of in-game purchases must show prices of virtual items clearly and prominently. In addition, it is not enough just to show a virtual coin price. The costs in real currency must also be visible. In addition, the guidance looks closely at techniques that put players under pressure, such as buying moments at critical points in the game, continuous incentives, or strong visual and auditory pressure.

For founders in gaming and gamified products, this is an important signal. Monetization and engagement should not come at the cost of clear choices. Especially where vulnerable users play a role, the space becomes smaller.

Geolocation and forwarding

Geolocation also deserves attention. It may be legitimate to direct consumers to a local webshop based on location or to make differences in offerings and prices. This is not automatically an unfair trading practice. However, consumers must then be informed about this in a timely and clear manner, at the beginning of the ordering process.

For international scale-ups, this means that localization is not a purely commercial or technical choice. Anyone who uses automatic redirects, changes the offer by country or shows price differences based on location must assess whether the user understands enough what is happening and what that means for their transaction.

Lock-in can also become relevant under consumer law

Another theme that is becoming increasingly important for digital business models is lock-in. Consumers can end up in ecosystems where switching is actually difficult, for example because apps, digital content, data or functionalities cannot easily be transferred to an alternative.

The European approach shows that barriers to switching or terminating a contract can also, under certain circumstances, be seen as unfair trading practices. That does not mean that every closed environment is prohibited. The nuance remains important. Not every form of bundling, pre-installed software or ecosystem formation is automatically unfair.

For startups and scale-ups, this is primarily a design theme. How easy is it for a user to cancel? What does he lose when he leaves? Is that loss a logical result of the product, or is switching artificially made unattractive? And how transparent are you about this beforehand?

Think of subscriptions with frictional cancellation paths, digital content that becomes completely inaccessible after termination, or platform models where accrued value is hardly transferable. Companies that focus on retention are particularly well advised to test whether retention comes from product value or from barriers.

What founders, product teams and marketers should do with this in concrete terms

The most important lesson is that unfair trading practices in the digital sector are rarely just a legal issue. This is a topic that touches on product design, UX copy, lifecycle marketing, creator management, pricing and marketplace governance.

For founders, this means: don't put consumer law on the checklist until the end of the trip. Take it with you when you're thinking about ranking models, review architecture, checkout flows, in-app monetization, or experimental growth tactics.

For product teams, this means: assess not only whether a flow converts, but also whether an average consumer understands that flow. Can a user see why something is at the top? Does he understand whether a review is genuine? Does he see what has been paid, what has been sponsored and what the real price is? Can he also make a choice without psychological pressure?

For marketing teams, that means: be cautious about hybrid forms of advertising that blend in with organic content. Influencer marketing, native advertising and social proof provide reach, but also risk if the commercial character is not sufficiently recognisable.

For marketplace and platform teams, that means: think carefully about division of roles and responsibility. Who is selling here exactly? Who should provide what information? And does the interface show reality, or just the desired commercial story?

The core for startups and scale-ups

The rules about unfair trading practices are no longer a fringe phenomenon in the digital sector. They hit exactly where modern tech companies organize their growth: ranking, trust, personalization, friction, design and retention.

This makes this topic not only legally relevant, but also strategic. A startup that learns early to combine transparency, clear choices, and honest interface patterns with commercial strength is not only building compliance, but also sustainable trust.

And that's exactly where the real profit lies for many tech companies. Not in maximizing what is still possible, but in building a product experience that is fast, smart and compelling without consumers losing sight of reality along the way.

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