Battling dark patterns

Ensuring consumer protection on the web will boost growth

The Central Consumer Protection Agency (CCPA) has done well to issue guidelines for the prevention and regulation of dark patterns on the web. These guidelines will apply to all digital platforms offering goods and services in India, including advertisers and sellers. Notably, this comes just a few months after the Department of Consumer Affairs (DoCA) issued a press note urging e-commerce companies and industry associations to refrain from practices involving dark patterns.

Dark patterns refer to the variety of deceptive practices used to manipulate or significantly influence online consumers into making choices which may not be in their best interests. Practised by digital platforms and advertisers to maximise profits, they are designed to manipulate user behaviour by exploiting cognitive biases and psychological vulnerabilities. In fact, dark patterns are widely recognised as unfair trade practices. Whether it is pre-ticked donations, a false timer showing offer expiry, hotel booking websites displaying messages like “only two rooms left”, or being part of mailing subscription lists that are hard to opt out of, consumers are tricked into buying goods or services online which they may not intend to. The proliferation of dark patterns may only increase with further advances in machine learning and automation. Firms operating in the digital realm also collect user data by evading informed consent, thereby raising ethical concerns.

Worryingly, such tricks are also reportedly being used in the financial services industry, which can cause significant harm to savers and investors. In this context, Reserve Bank of India Deputy Governor M Rajeshwar Rao recently cautioned against dark patterns in the mis-selling of digital loans where consumers are deceived into availing themselves of high-cost, short-term credit. Several studies have also shown that certain socioeconomic groups and individuals with low digital literacy are more susceptible to dark patterns. Therefore, the aim of regulation is twofold: To protect consumers from manipulation and prevent discrimination, so that dark patterns do not exacerbate current inequalities. The DoCA, in collaboration with the Indian Institute of Technology (BHU), conducted a Dark Patterns Buster Hackathon a few months back to design and prototype an innovative app or software that can detect dark patterns on e-commerce platforms.

The new guidelines thus are an important step towards protecting internet users, in addition to the existing regulatory framework. While not referred to as dark patterns, existing regulations also aim to control the usage of similar tactics, particularly in the realm of consumer rights. These include the Consumer Protection Act, 2019, and the Digital Personal Data Protection Act, 2023. It is thus important that overlaps in regulation are avoided. Besides, it is important to ensure that regulations do not end up significantly increasing the compliance burden for firms in India’s digital economy, which has a huge potential. According to the government’s projection, the digital economy is expected to reach 20 per cent of India’s gross domestic product by 2026, as against about 11 per cent today. The new guidelines, along with other laws in the digital economy, thus, should enable a level playing field for both consumers and businesses. Given the use of digital means in buying goods and services will only increase, with new consumers being added at a rapid pace, they must be protected and enabled to make choices.