Can platforms be penalized for using dark patterns to manipulate user behavior?

In the growing world of e-commerce, the way websites and apps are designed can have a huge impact on consumer decisions. One such design technique that has come under scrutiny is the use of dark patterns deceptive strategies used to manipulate user behavior. These dark patterns can include tactics like pre-selected checkboxes, hidden subscriptions, confusing cancelation processes, and other tricks designed to get users to make decisions they wouldn't normally make, often to the benefit of the platform.

But are platforms that use these tactics legally liable? Can they face penalties under Indian law for using such manipulative methods?

What Are Dark Patterns?

• Dark patterns refer to interface design choices used to manipulate users into actions they didn't intend to take. Common examples of dark patterns include:
• Sneak into Basket: Adding items to the shopping cart without user consent.
• Hidden Costs: Surprising users with unexpected fees late in the checkout process.
• Forced Continuity: Making it difficult for users to cancel subscriptions or free trials, often leading to unwanted charges.
• Bait and Switch: Advertising a product at a low price, then switching the product or increasing the price once the consumer proceeds.
• Confirmshaming: Guilt-tripping users into opting into a service or subscription by using phrases like No, I don’t want to save money.
• These practices are designed to exploit user psychology and take advantage of people who may not fully understand the terms of a transaction, leading to unintended purchases, ongoing subscriptions, or personal data being shared.

Legal Framework and Regulation in India

• Consumer Protection Act, 2019 (CPA): The Consumer Protection Act, 2019 is the primary law protecting consumers from unfair trade practices, misleading advertising, and deceptive tactics in India.
• Section 2(1)(r) defines unfair trade practices, which includes misleading and fraudulent practices to induce consumers to enter into contracts.
• Section 21 empowers the Consumer Protection Authority to take action against any platform engaging in unfair or deceptive practices. Dark patterns, which can be considered forms of deceptive conduct, may fall under this provision if they mislead or exploit consumers.
• Consumer Protection (E-Commerce) Rules, 2020: The Consumer Protection (E-Commerce) Rules, 2020 aim to regulate the growing e-commerce sector and ensure fairness and transparency. These rules specifically address:
• Disclosure of terms and conditions in an easily accessible manner.
• Prevention of manipulative behavior that exploits consumers, such as misleading ads, hidden fees, or intentionally confusing cancellation procedures.
• Under these rules, platforms are required to be transparent, and any manipulation that affects the consumer’s decision-making could be considered a violation.
• Indian Contract Act, 1872: The Indian Contract Act governs contracts in India, including electronic contracts. Section 10 states that a contract must have free consent of both parties to be valid. If dark patterns result in manipulated consent or misleading agreements, they can be contested in court under the principle that true consent was not given.
• If a consumer is coerced or misled into agreeing to something through deceptive practices, the agreement may not be enforceable.
• Information Technology Act, 2000 (IT Act): The IT Act governs electronic transactions and digital agreements. While it doesn’t specifically address dark patterns, it does promote fair practices in e-commerce and consent in digital contracts.
• The use of misleading or manipulative tactics that affect the free will of the user can potentially violate contractual fairness and consumer rights under the IT Act.

Can Platforms Be Penalized for Dark Patterns in India?

• Penalties for Unfair Trade Practices: Platforms using dark patterns that deceive or manipulate consumers may be penalized under the Consumer Protection Act, 2019.
• Penalties for unfair trade practices can include fines (up to ₹10 lakh for the first offense) and compensation to affected consumers.
• Repeated violations can lead to higher fines (up to ₹50 lakh) and potentially suspension or cancellation of the platform’s registration under the Consumer Protection Authority.
• Unfair Terms and Deceptive Conduct: Dark patterns that result in misleading consumers about the nature of the service or product, such as subscription traps or hidden fees, can be seen as unfair trade practices.
• Platforms can be ordered to refund consumers and revise their business practices to ensure transparency and fairness.
• Consumer Complaints and Legal Action: Consumers who feel they’ve been manipulated by dark patterns can file complaints with the Consumer Protection Authority or the Consumer Forum.
• Courts have also recognized that deceptive advertising or misleading tactics can lead to legal consequences. If a user is tricked into a contract, they may argue that they never provided valid consent, thus rendering the contract voidable.

Global Precedents and Impact

• While India has yet to fully establish specific regulations around dark patterns, there is growing awareness globally about the need for ethical design in online platforms.
• Internationally, platforms like Amazon, Facebook, and others have faced scrutiny for using dark patterns. European Union regulations (such as the GDPR and Consumer Protection Directive) have taken steps to curb dark patterns, and India may follow suit as awareness grows.

Example Case

• A popular e-commerce platform runs a free trial for a premium membership, but the user is automatically enrolled into a paid subscription once the trial ends, and the cancellation process is difficult to find or requires multiple steps.
• Steps Taken:
• The consumer contacts customer support to cancel the subscription but faces delays and confusing instructions.
• The consumer files a complaint with the Consumer Forum under the Consumer Protection Act, citing dark pattern tactics like forced continuity and lack of transparency.
• The Consumer Forum orders a refund for the consumer and issues a penalty to the platform for engaging in unfair trade practices under the Consumer Protection Act.

Conclusion

• Yes, platforms can be penalized for using dark patterns that manipulate or deceive consumers in India. Under the Consumer Protection Act, 2019, E-Commerce Rules, 2020, and Indian contract law, any unfair trade practices or misleading tactics that compromise consumer rights or mislead users into actions they wouldn’t have taken freely could lead to legal consequences, including fines and compensation.
• As the digital economy continues to grow, there is increasing emphasis on ethical design practices and ensuring that consumers are not exploited by deceptive online tactics. Platforms must prioritize transparency and consumer consent to avoid legal repercussions and build trust with users.