From streaming to shopping, dark patterns rampant in digital services, says LocalCircles

Hyderabad: Digital Age Retail Pvt Ltd, more popularly known as FirstCry, was fined Rs 2 lakh on Friday for misleading advertisements and unfair trade practices.

The Central Consumer Protection Authority (CCPA), in its order, said that the company was engaging in publishing misleading advertisements and unfair trade practices on its e-commerce platform.

A detailed examination of the case revealed that the company was operating its customer retail services using a ‘dark pattern’ called drip pricing, which misled the customers over the final payable amount and undermined informed decision-making.

Dark patterns among online sites—from digital lending, edtech, to OTTs and food delivery platforms—are increasingly becoming prevalent with the increase in e-commerce. It has also received the attention of the government, leading to a gazette notification issued in 2023.

What are dark patterns?

Dark patterns involve deceptive practices that manipulate users into making decisions they might not otherwise make.

These patterns can lead to higher prices, hidden fees, subscription traps and a generally frustrating experience.

13 dark patterns

In the ‘Guidelines for Prevention and Regulation of Dark Patterns’, the CCPA defined the 13 dark patterns that will be classified as unfair trade practices.

Under the Consumer Protection Act, 2019, violations can attract penalties, including fines up to Rs 20 lakh and imprisonment up to six months.

However, there seems to be little let-up in the use of dark patterns by apps and online platforms, be it travel, hospitality, banking and insurance or e-commerce.

On June 5, the CCPA directed online platforms to undertake a self-audit and get rid of dark patterns within three months. The three-month deadline is over, but dark patterns seem to be continuing with little safeguards for consumers.

Data on online platforms exhibiting dark patterns

To determine the extent of dark patterns, LocalCircles conducted a survey where dark patterns across various platforms were assessed.

According to the survey, digital lending, edtech, online banking, e-commerce, OTTs, app taxis, quick commerce, and food delivery platforms are among those using seven or more dark patterns.

A breakdown of the volume of dark patterns in each online sector can be seen in the image below.

Over 1 in 2 online platforms used forced action, drip pricing and bait and switch dark patterns

LocalCircles stated that, based on analysis of over 290 online platforms in India and based on inputs, complaints and experiences of over 2,50,000 consumers across 392 districts, some dark patterns are used more than others by various entities.

Here’s a description of the three most popular dark patterns.

Forced action: This dark pattern involves forcing the user to take an action to move to the next transaction step. This may include downloading an app or seeking personal data that is not required or mandatory to complete the transaction. This has been reported and validated across 74 per cent of platforms in India.

Drip Pricing: This is also referred to as hidden charges and involves not displaying prices upfront on a transparent basis and adding additional charges at the final step.

Charges for delivery, convenience charges, processing charges, and weather surcharges are typically not disclosed upfront and added at the last step, leading to the final price of the product/service becoming as much as double the base price. This has been reported and validated across 69 per cent of platforms in India.

In the case of FirstCry, it was observed that disclaimers such as ‘additional charges may apply’ or ‘GST and Add’l charges may apply on discounted price’ did not override the statutory requirement that the MRP must be inclusive of all taxes.

By representing the price as tax-inclusive and then levying GST at checkout, the company engaged in drip pricing.

Bait and switch: This dark pattern is fairly common across Indian platforms, where a product is typically displayed at a low price; however, the price changes upon the user clicking it or adding it to the cart to a higher price.

Another common example is showing a product at a low price but not displaying that the low price is applicable to just one unit. The user ends up adding multiple units in the cart, with the additional units being billed at a higher price.

Based on this LocalCircles analysis, among the most used dark patterns, forced action tops the list with 211 or 73 per cent of platforms using it; 201 platforms or 69 per cent have been found to use drip pricing; and 155 platforms or 53 per cent have been found to use bait and switch.

A detailed list of the dark patterns and the percentage of their use by websites can be found in the image below.

Overall, 22 months after the CCPA notified 13 dark patterns and asked online entities to desist from using them, there appears to be a limited impact of the government advisories and call to action, with just 3 per cent of platforms in India being free of dark patterns. While some platforms have addressed a few of their dark patterns in the last three months, the majority have ignored the CCPA advisories.

Extent of survey

The dark patterns research by LocalCircles was conducted over 22 months and received over 2,90,000 responses from consumers located in 392 districts of India. As many as 64 per cent of respondents were men, while 36 per cent of respondents were women. As many as 45 per cent of respondents were from Tier 1, 29 per cent from Tier 2, and 26 per cent of respondents were from Tier 3, 4 and rural districts.