Central Consumer Protection Authority have notified guidelines for Prevention and Regulation of Dark Patterns, 2023  to discourage use of Dark Patters by online sellers, marketplaces, ecommerce entities and advertisers while promoting or offering any goods or services to online users.

 

Dark patterns has been defined as such practices of selling goods or services wherein the online users are misled, or forced or manipulated to buy any product or services knowingly or unknowingly.

Regulations also specifies prohibited Dark Patterns with few illustrations. Some of most commonly used dark patterns which are covered are

1. False Urgency: Promoting a product or service by creating a sense of false urgency in the mind of users limited stock, limited time offer or once in a life time offer etc.
2. Basket Sneaking: Adding some products, services or cost automatically in the basket or price to be paid by the users or without making a proper disclosure to the user.
3. Forced Action : Legislature have prohibited to force a user to take any action or use any additional services or buy any additional product or sharing any sensitive information which is not related to the product or services the user intends to buy or use.
4. Subscription trap: Making process of un-subscribing, cancellation or refund cumbersome or auto debit or subscription of money on periodical basis through auto debits while data was collected for free trial.
5. Interface Interference: creating an interface which hides or un-highlight the relevant information or highlights irrelevant information.
6. Bait and Switch: using the customer activity data to deceptively offering product/service of higher price.
7. Drip Pricing: Practice of not showcasing price upfront to users but after selection of product/services or charging higher for what user have already paid without any additional offerings.
8. Disguised advertisements : means a practice of posing, masking advertisements as other types of content such as user generated content or new articles or false advertisements, which are designed to blend in with the rest of an interface in order to trick customers into clicking on them .
9. Nagging: Practice of interfering to provide some sensitive information while user is using any service.
10.  Trick Question : Using tricky questions or language to confuse or misguide a user
11. SaaS Billing: Practice of charging fees on recurring basis without knowledge or consent of the user or charging fees for services not used.
12. Roque Malwares: Planting false messages about malware to extract money.

 

Implications

 

1. Modifying the marketing and sales pitch

2. Impact on revenue models as many organisations earn revenue by way of

• Cross-selling or promoting the use of products or services of others
• Recurring SaaS revenue without consent
• Forced selling services or products

3. Customer acquisition and retention strategy to be modified in many cases as the forced use or continuity services or goods has been declared illegal.

4. Once the sellers are obliged to provide for facility to discontinue the services more prominently then it will surely result in decrease of user base

5. Since this notification also restricts forcing user to provide access to Personal information, then it may impact lot of applications whose revenue models were dependent on such data.

6, Further restriction on collection of Personal information will also create an auto check on use of AI or ML on personal sensate data of the users.

 

Penal Consequences

 

a. These Guidelines have been issued by the Consumer Protection authority by virtue of their power under Section 18 of the Consumer Protection Act, 2019

b. As per aforesaid section , consumer protection authority have the power to issue directions to curb malpractices and protect interest of consumers

c. This means that if authority identifies any one violating the guidelines , then it may act as per Section 18 and issue directions under Section 21 and Section 22 to check the any practice of dark patterns;

d. As per Section 21 and Section 22 authority may impose penalty or to issue direction to stop such practices.

e. Further as per Section 88 , if someone fails to comply with the direction under Section 21 or 22 , then they can be prosecuted and sentenced to imprisonment upto 6 months or fine upto Rs. 20 lacs or both .

 

Impact will be far reaching and may have an impact same as what happened to Mobile VAS business post DoT’s mandate to take prior consent in writing before offering any VAS services.