Have you seen this while shopping online?
Hurry- Limited stock available!
Flash deal for 10 minutes only!
Have you been redirected to a download page instead of shutting a popup while playing an online game?
Have you selected food items at a certain price and suddenly noticed addition of delivery fee, packaging fee, partner fee, plus an additional tax just when you check out your cart?
Welcome to the world of dark patterns!
Dark pattern is a blanket term used to refer to a variety of deceptive practices used to manipulate or heavily influence online consumers into making choices that they wouldn’t perhaps otherwise make or choices that are not in their best interest.
On August 2, 2023 the Department of Consumer Affairs (“the DoCA”), issued a press note to urge e-commerce companies and industry associations to refrain from dark patterns.[1] This is in continuation to the DoCA’s press note dated June 30, 2023 which was issued to address the subject of dark patterns in online interface of platforms, that are likely to deceive or manipulate consumers, which fall under the category of dark patterns[2]. The DoCA had illustrated 10 practices as dark patterns. They are:
1. False urgency refers to the tactic of creating a sense of urgency or scarcity to pressurize consumers into making a purchase or taking certain action.
Example: When a consumer ends up buying a product based on an advertising that claims ‘limited stock available’, it becomes a dark pattern.
2. Basket sneaking is when additional products or services are added to a shopping cart, generally at the check-out page, without the consumer specifically adding these products or services to the cart.
Example: Donations to a charity or ancillary products being added to the cart.
3. Subscription trap refers to the practice of making it easy for consumers to sign-up for a service or subscription but making it difficult to unsubscribe.
Example: When opt-out/ unsubscribing services are hidden or require multiple steps to arrive at the cancellation page.
4. Confirm shaming refers to the act of guilting consumers into opting for products or services that they would not otherwise choose. It criticizes or attacks consumers for not conforming to a particular belief or viewpoint. A consumer often finds this in the ‘unsubscribe’ section of notifications.
Example: ‘No thanks, I hate saving money’ or ‘No thanks, I hate the environment’.
5. Forced action refers to forcing consumers into taking an action that they wouldn’t otherwise take.
Example: When a consumer is required to compulsorily sign up for ancillary services or products to access the originally intended service or product.
6. Nagging refers to persistent, repetitive and constant request for action.
Example: The ‘sign-up’ or ‘subscribe now’ box keeps repetitively opening on an entirely unrelated webpage at various steps of accessing such page.
7. Interface interference refers to the tactic of making it difficult for consumers to take certain actions, such as cancelling subscription or deleting an account.
Example: When a consumer is redirected to another page while trying to cancel a pop-up advertisement.
8. Bait and switch refers to the practice of luring consumers with advertisements of products of certain quality or efficiency, but delivering a different or poor quality product instead.
Example: When an entirely different product is delivered in place of the original one, or when the images and description of the product received do not match the original.
9. Hidden costs refer to the tactic of adding additional costs, often on the check-out or billing page, when a consumer is already committed to making the purchase.
Example: When additional costs in the form of convenience fee, packaging fee, rain fee, handling fee, etc., get levied at the time of checkout.
10. Disguised ads refer to the act of influencers and celebrities posting content regarding a product or service to make it look like editorial organic content for a product or service that they have personally used or experienced and hence are endorsing it, when in fact they are getting paid for it. Paid advertisement, when not disclosed, is misleading to a consumer.
Example: When an influencer endorses or promotes a product or an experience as their own, without mentioning that it is paid advertisement.
Consumer Protection Law
The Consumer Protection Act, 2019 (“the CPA”) defines consumer rights[3]. Tricking or coercing a consumer into taking certain actions, or manipulating them into making certain choices, exploits a consumer’s interest and hence amounts to an unfair trade practice, as defined under the CPA[4]. Under the CPA, a consumer has the right to seek redressal against an unfair trade practice.[5] For regulating matters relating to violation of consumer rights, unfair trade practices and false or misleading advertisements, which are prejudicial to the interests of consumers, the Central Government has established a Central Consumer Protection Authority (“CCPA”). The CCPA is entrusted with protecting and enforcing the rights of consumers[6]. The CCPA can make inquiries or investigations into violations of consumer rights or unfair trade practices, either suo moto or upon receiving a complaint.[7] Further, the CCPA can issue necessary guidelines to prevent unfair trade practices.[8] Upon investigation, if the CCPA is satisfied that consumer rights are being violated, it is authorised to pass an order to the effect of (i) withdrawal of products or services which are dangerous, hazardous or unsafe; (ii) direct reimbursement of the price paid by a consumer for such product or services; and (iii) direct discontinuation of practices that are unfair and prejudicial to a consumer[9].
Under the CPA, a consumer can also file a complaint with the district commission in relation to any goods or services that follow unfair trade practices.[10] Upon being satisfied of the claims, the district commission has the authority to pass an order to inter alia discontinue such unfair trade practices[11].
Any failure in complying with the CCPA directions can result in imprisonment for a term extending up to six months or a fine which may extend up to INR 20 lakh, or both[12]. Further, causing false or misleading advertisement is also a punishable offence under the CPA, with imprisonment of up to two years and a fine of up to INR 10 lakh; and for every subsequent offence, imprisonment of up to five years and a fine of up to INR 50 lakh[13].
E-Commerce Rules
The Consumer Protection (E-Commerce) Rules, 2020 (“E-Commerce Rules”) apply to all goods and services bought or sold over digital or electronic network. It applies to all models of e-commerce that include marketplace[14] and inventory models[15] and applies to all forms of unfair trade practices. Under the E-commerce Rules, e-commerce entities[16] are prohibited from adopting any unfair trade practices[17]. The rules further forbid sellers from adopting any unfair trade practices[18]. Violation of E-Commerce Rules results in the same consequences as set out under the CPA (stated above).
Advertising Standards Council of India
To create awareness about dark patterns, the Advertising Standards Council of India (“ASCI”),a self-regulatory body for advertisements in India, had released a discussion paper on dark patterns in November 2022[19]. As per this paper, 29% of advertisements processed by ASCI in 2021-22 pertained to disguised advertising by influencers, a kind of dark pattern.
Subsequently, on June 15, 2023, the ASCI released Guidelines For Online Deceptive Design Patterns in Advertising[20], which identified (i) drip pricing (similar to hidden costs as stated above); (ii) bait and switch; (iii) false urgency; and (iv) disguised advertising as key dark patterns in advertising. As per ASCI, these guidelines will be effective form September 1, 2023 and will apply to advertising on all modes and mediums.
Litigations pertaining to dark patterns
Internationally, regulators in the EU, the US and the UK have been taking strict action against dark patterns. In the most recent case, US Federal Trade Commission took action against Amazon Inc. for enrolling consumers on their ‘Prime’ programme without their consent and for making the cancellation process complicated.[21] Under the French Data Protection Act, Apple Distribution International was fined €8 million for implementing ‘personalised ads’ setting as default without prior consent and making it hard to change the setting by involving multiple steps[22]. Epic Games paid $245 million to settle charges, related to using deceptive patterns in Fornite’s payment system[23].
Way forward
With consumers increasingly opting for e-commerce, it is essential for the e-commerce industry to adhere to practices that do not cause any harm to consumers. In June 2023, the Ministry addressed a letter to key industry stakeholders stating that non-adherence to best practices in the interest of consumers will result in action.[24] Consumers are now invited to report instances of dark patterns and manipulative practices on the national consumer helpline.[25] With the Government’s increased focus on building a comprehensive framework to protect consumer interest, it is imperative that online businesses in India be aware of the law as well as the consequences of such marketing trends, and establish guidelines that discourage unfair trade practices, such as dark patterns.
For further information, please contact:
Aarushi Jain, Partner, Cyril Amarchand Mangaldas
aarushi.j@cyrilshroff.com
[1] Press Information Bureau (pib.gov.in)
[2] Press Information Bureau (pib.gov.in)
[3] Section 2(9) of the CPA defines “Consumer Rights” to include (i) the right to be protected against the marketing of goods, products or services which are hazardous to life and property; (ii) the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;(iii) the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;(iv) the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;(v) the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and (vi) the right to consumer awareness;
[4]Section 47 of the CPA defines “Unfair Trade Practice” as a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely (i) making any statement, whether orally or in writing or by visible representation including by means of electronic record, which (a) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model; (b) falsely represents that the services are of a particular standard, quality or grade; (c) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods; (d) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have; (e) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have; (f) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services; (g) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof: Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence; (h) makes to the public a representation in a form that purports to be (A) a warranty or guarantee of a product or of any goods or services; or (B) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out; (i) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made; (j) gives false or misleading facts disparaging the goods, services or trade of another person.
[5] Section 2(9) (v) of the CPA.
[6] Section 10(1) of the CPA.
[7] Section 18 (2) (a) of the CPA.
[8] Section 18 (2)(l) of the CPA.
[9] Section 20 of the CPA.
[10]Section 35(1) of the CPA.
[11]Section 39(g) of the CPA.
[12] Section 88 of the CPA.
[13]Section 89 of the CPA.
[14] Section 3 (1) (g) defines “marketplace e-commerce entity” means an e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers.
[15] Section 3 (1) (f) defines “inventory e-commerce entity” to mean an e-commerce entity which owns the inventory of goods or services and sells such goods or services directly to the consumers and shall include single brand retailers and multi-channel single brand retailers.
[16]Section 3(1) (b) of the E-commerce Rules defines “e-commerce entity” to means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity.
[17] Section 4(3) of the E-commerce Rules.
[18]Section 6(1) of the E-commerce Rules.
[19] Dark Patterns document (ascionline.in).
[20] Guidelines for Online Deceptive Design Patterns in Advertising.docx (ascionline.in)
[21] FTC Takes Action Against Amazon for Enrolling Consumers in Amazon Prime Without Consent and Sabotaging Their Attempts to Cancel | Federal Trade Commission
[22] Advertising ID: Apple Distribution International fined 8 million euros | CNIL.
[23] FTC Finalizes Order Requiring Fortnite maker Epic Games to Pay $245 Million for Tricking Users into Making Unwanted Charges | Federal Trade Commission.
[24] dark patterns: Stop menace of dark patterns or face strict action: government warns online players – The Economic Times (indiatimes.com)
[25] Press Information Bureau (pib.gov.in), Consumers can report instances of ‘dark patters’ or provide feedback and report such manipulative online practices on the National Consumer Helpline (NCH) by calling ‘1915’ or through Whatsapp on 8800001915.
