IR Smartclass: Dark Patterns in E-commerce

A primer on the 13 unfair digital commerce practices prohibited by The Central Consumer Protection Authority which impair consumer interest

As many as 71% of online consumers surveyed by research firm LocalCircles reported being subject to hidden charges for purchases via apps and software as a service (SAAS) platforms. These charges were not presented upfront when they were finalising the purchase but only popped up when making the payment.

Furthermore, 67% of the 44,000 consumers surveyed fell prey to a subscription trap. What they assumed was a one-time software or service later turned out to be a subscription.

Hidden charges and subscription traps are among unfair trade practices under the Consumer Protection Act, 2019 identified as ‘dark patterns’ by The Central Consumer Protection Authority (CCPA).

Exercising the powers conferred by Section 18 of the Consumer Protection Act, 2019, the CCPA issued “Guidelines for Prevention and Regulation of Dark Patterns, 2023” on 30 November 2023. The guidelines cover 13 dark patterns specified by the CCPA.

While they specifically seek to protect consumer interests in e-commerce transactions, the guidelines apply to all platforms that offer goods or services in the country. And even include advertisers and sellers. They seek to hold brands that use deceptive practices accountable and penalise them.

“Every brand needs to embrace these standards and create a more trustworthy and responsible atmosphere for online commerce, putting consumers’ trust at the forefront. This will help create a fair and transparent marketplace where consumers can buy products without the fear of being cheated,” Rahul Singh, Founder EcoSoul Homes said.

What are dark patterns?

The CCPA defines dark patterns as “any practices or deceptive design pattern using user interface or user experience interactions on any platform that is designed to mislead or trick users to do something they originally did not intend or want to do, by subverting or impairing the consumer autonomy, decision making or choice, amounting to a misleading advertisement or unfair trade practice or violation of consumer rights.”

In his LinkedIn blog post on the topic, Col. Zahl Tantra, Cluster head, North, Auto & Farm Sector, Mahindra Logistics Ltd. further explained the concept. “Dark patterns in digital commerce in India are a serious issue that affects the rights and interests of consumers,” he wrote.

“They are deceptive and manipulative user-interface practices that online platforms use to trick or coerce consumers into making choices that benefit the platform but not the consumer,” he added.

Tell me more…

The 13 dark patterns identified by CCPA are:

1. False urgency: This involves creating a false sense of urgency, scarcity such as limited-period offers or few airline seats/products or movie tickets left that pressures consumers into buying a product or service in haste. This usually plays on the consumer’s fear of missing out (FOMO).
2. Basket sneaking: This is a form of cart manipulation and involves including items or services in the shopper’s basket without their explicit consent or awareness.
3. Subscription traps: Facilitating a straightforward service sign-up process for consumers while intentionally complicating the cancellation procedure, often achieved through concealing the cancellation option or imposing multiple steps, making an opt-out difficult.
4. Confirm shaming: “This dark pattern involves the use of a phrase, video, audio, or any other means to instil a sense of shame, guilt, or ridicule in users to persuade them to purchase a good or service from the platform or extend their subscription to a service, mainly for profit by stifling their freedom of choice,” explained Ashima Obhan and Aparna Amnerkar of advocate and patent consultancy firm Obhan & Associates on their website.
5. Forced action: This refers to compelling consumers to purchase extra items, subscribe to unrelated services, or share personal information just to access or buy the products or services they initially desired.
6. Nagging: This involves bombarding users with continuous communication including repeated requests, and information prompts to push a transaction unrelated to their existing relationship.
7. Interface interference: This dark pattern involves manipulating the design interface in such a way that it highlights certain information that the platform wants to push while concealing other details, to mislead users from taking intended action such as deleting an account.
8. Bait and switch: This involves using a proposition to lure customers and then delivering something else.
9. Drip pricing: Showing one price before purchase and adding extras later or not disclosing in-app purchases and other additional charges that the user would have to pay and revealing them only on payment or at later stages of using the service or platform.
10. Disguised advertisement: Camouflaging ads as forms of content, such as user posts, news articles, false promotions or reviews.
11. Trick Question: Intentionally using vague or confusing language, double negatives, or other similar tricks to misguide a user from taking the desired action or prompting another action.
12. Saas Billing: In this, a subscription is extended or overcharged discreetly such as converting free trials to paid subscriptions, debiting user’s accounts without notification, and auto-renewing monthly subscriptions.
13. Rogue Malwares: This involves using fake ransomware or scareware leading users to believe that their computer is infected and persuading them to pay for a fake malware removal tool, which installs additional malware on their devices.

“The list of scenarios is comprehensive enough to prevent brands from wilfully (or otherwise) impairing the consumer’s autonomy, decision making or choice. This intervention was long due!” Siju Narayan, a retail industry practitioner and chief experience officer, Rexemptor Consult LLP, who found these “innovative marketing tricks” a major irritant and one that impacted customer experience (CX) irreparably.

How does it impact e-commerce players?

The guidelines compel digital players to follow transparent practices at every stage.

“Now, brands will be forced to adopt a more “honest” approach to enabling a truly frictionless customer journey (resulting in great CX!)—but this will come at a cost since the erring platforms will need more than a few tweaks to fall in line,” said Narayan. He added that the cost of such tweaks will always be far less than the cost of noncompliance with the guidelines.

The industry practitioner explained that apart from the financial liability (Rs. 10 lakh to Rs. 50 lakh) and two years of imprisonment, erring brands will face the prospect of being disowned by already-attention-deficit consumers. “Not a happy prospect in today’s hyper-competitive world,” he added.

According to Singh of EcoSoul, these regulations will not only protect consumers from exploitation online but also help honest brands to grow and flourish and bring a fair and transparent marketplace.

More such insights at India’s biggest retail intelligence event–Phygital Retail Convention 2024.