Central Consumer Protection Authority issues Guidelines to regulate Dark Patterns

The Central Consumer Protection Authority (“CCPA”) has notified the Guidelines for Prevention and Regulation of Dark Patterns, 2023 (“Guidelines”) in the Official Gazette on November 30, 2023. These Guidelines precedes the draft Guidelines issued by the Department of Consumer Affairs in September 2023 after a two month long interactive stakeholder consultation along with the Advertising Standards Council of India (ASCI) which were open for suggestions of the public until October 2023.

The Guidelines have been issued in addition to ASCI’s guidelines for online deceptive design patterns in advertising (ASCI’s Guidelines) which were published on June 15, 2023. ASCI’s Guidelines apply in relation to advertising in digital media.

1. 1. DEFINITION AND SCOPE OF DARK PATTERNS

The Guidelines define dark patterns as, “practices or deceptive design pattern using user interface or user experience interactions on any platform that are 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 misleading advertisement or unfair trade practice or violation of consumer rights”. In other words, a dark pattern is a user interface to trick or manipulate users into making choices which are detrimental to their interests.

The Guidelines prohibit any person, including any platform, from engaging in any dark pattern practice and Annexure 1 of the Guidelines (discussed below) contains a non-exhaustive list of dark pattern practices along with illustrations which may be updated by CCPA.

1. 1. APPLICABILITY OF THE GUIDELINES

These Guidelines are applicable to –

1. 1. 1. all platforms^[1] systematically offering goods or services in India;
      2. advertisers^[2];
      3. sellers^[3].

Unlike the ASCI Guidelines (scope of which is limited only to advertisements), the Guidelines cover wider consumer concerns and are applicable to all the online platforms  i.e. a website, mobile applications etc which also includes all foreign entities which offers goods and services in India; advertisers who advertise either directly or entrusting it to others as well as sellers of the product and/or service.

1. SPECIFIC DARK PATTERNS UNDER THE GUIDELINES

While Annexure 1 of the Guidelines provide a list of 13 ‘Specified Dark Patterns’, the Guidelines clearly states that specified dark pattern practices are only guidance and shall not be construed as an interpretation of law which means that the list of dark pattern illustrations is merely indicative and different facts/conditions may entail different interpretations.

1. False Urgency: The practice of falsely stating or implying that quantities of a particular product are more limited than they actually are or showing false popularity of a product, to mislead a user into making an immediate purchase or taking an immediate action.

2. Basket Sneaking: This means inclusion of additional items such as products, services, payments to charity or donation at the time of checkout from a platform, without the consent of the user which results in an increase in amount payable by the user than the amount payable for the goods/services chosen by the user. The addition of free samples or providing complimentary services or addition of necessary fees (such as delivery charges, gift wrapping, additional taxes on the product) disclosed at the time of purchase have been excluded from the practice of basket sneaking.

3. Confirm Shaming: The practice of using a phrase, video, audio or any other means by the platform to create a sense of fear or shame or ridicule or guilt in the mind of the user, primarily for the purpose of making commercial gains by subverting consumer choice.

4. Forced Action: This refers to the practice of forcing a user into taking an action that would require them to buy any additional goods or subscribe or sign up for an unrelated service such as newsletters or share personal information in order to buy or subscribe to the product or service originally intended by the said user.

5. Subscription Trap: This refers to the process which is easy to sign up for but difficult to cancel. Subscription trap are quite common and often used by the platform for a continued subscription of its services and includes practices of making cancellation of a paid subscription a complex and lengthy process; hiding the cancellation option for a subscription; forcing a user to provide payment details or authorization for auto debits for availing a free subscription; or making the instructions related to cancellation of subscription ambiguous and cumbersome.

6. Interface Interference: This refers to the practice wherein the user interface of a platform is designed to misdirect a user from taking an action desired by her. Few examples of the practices which should be avoided includes designing a virtually less prominent/light coloured option for selecting ‘No’ in response to a pop-up asking the users if they wish to make a purchase or symbol ‘X’ icon on the top-right corner of a pop-up screen leading to opening-up of another ad rather than closing it.

7. Bait and Switch: This refers to the practice of advertising a particular outcome based on the consumer’s action, but instead serves an alternative outcome.To prevent users from being misled by the use of dubious practices, this guideline requires advertisers to make honest representations about the feature, price, availability of products and/or services.

8. Drip Pricing: This refers to the manipulative tactic wherein the elements of prices are not revealed upfront or are revealed surreptitiously within the user experience or post-confirmation of purchase (charging an amount higher than the amount disclosed at the time of checkout). This practice also involves tactics where a product or service is advertised as free without a disclosure that the continuation of use requires in-app purchase; or where a user is prevented from availing a service which is already paid for unless something additional is purchased.
   This is to prevent ambiguity around the final price and promote fair, easy price comparisons. This guideline requires the platforms to demonstrate the final price (such as inclusive of taxes, duties, charges) to the potential buyers along with the product’s price instead of revealing it at the checkout stage.

9. Disguised Advertisement: means the practice of 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 the interface in order to trick customers into clicking on them. The intent of this guideline is to clearly disclose/ distinguish the advertisement from the organic content so that the users are not misled and /or confused.

   The explanation clause of this guideline states that the disguised advertisement shall also include ‘misleading advertisement^[4]’ of the Consumer Protection Act 2019 as well as  the “Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022” shall also be applicable to it.  It also states that the responsibility of disclosing sponsored part of the content posted on a platform  is on the seller and/or advertiser who posts the said content.

10. Nagging: This refers to the pattern wherein users face an overload of requests, information, options, or interruptions; unrelated to the intended purchase of goods or services, which disrupts the intended transaction.

11. Trick Question: This refers to the practice of using confusing or vague language like double negatives in order to misdirect a user from taking desired action or leading consumers to take a specific response or action.

12. SaaS Billing: This refers to the process of generating and collecting payments from consumers on a recurring basis in a software as a service (SaaS) business model by exploiting positive acquisition loops in recurring subscriptions to get money from users as surreptitiously as possible. Some of the practices which should be avoided are converting free trial to paid subscription without any notification to the user, silent recurring transactions whereby the user’s account is debited or simply stated auto-renewing monthly subscriptions without informing users, charging customers for features and services they don’t use or using shady credit card authorization practices to deceive consumers.

13. Rogue Malwares: refers to using ransomware or scareware to mislead users into believing there is a virus on their computer and aims to convince them to pay for a fake malware removal tool that actually installs malware on their computer.

3. NON-COMPLIANCE OF THE GUIDELINES

   Given that CCPA defines the dark patterns as unfair trade practices, misleading advertisements or violation of consumer rights; non-compliance of the Guidelines will attract penalties under the Consumer Protection Act, 2019 (“CPA”).  For instance, under Section 21(2) of CPA, a penalty of ten lakh rupees may be imposed for false or misleading advertisement which may extend to fifty lakh rupees for every subsequent contravention.

   To conclude, with these Guidelines in place, there is an imminent need for all the platforms, advertisers and sellers to rebuild their marketing and advertising strategies and ensure that the specified dark patterns are not embedded in their user interface or user interface experiences. Further, use of artificial intelligence to detect dark patterns and manipulative practices and taking appropriate actions against such practices instead of pushing the users in a certain direction can result in robust implementation of these Guidelines.

   ^[1] Section 3(i) of  the Consumer Protection (E-Commerce) Rules, 2020: “platform” means an online interface in the form of any software including a website or a part thereof and applications including mobile applications;

   ^[2]: Section 2(b) of  the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022: “advertiser” means a person who designs, produces and publishes advertisements either by his own effort or by entrusting it to others in order to promote the sale of his goods, products or services and includes a manufacturer and service provider of such goods, products or services;

   ^[3] Section 2(37) of the Consumer Protection Act 2019: “product seller”, in relation to a product, means a person who, in the course of business, imports, sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains, or otherwise is involved in placing such product for commercial purpose and includes— (i) a manufacturer who is also a product seller; or(ii) a service provider, but does not include— (a) a seller of immovable property, unless such person is engaged in the sale of constructed house or in the construction of homes or flats; (b) a provider of professional services in any transaction in which, the sale or use of a product is only incidental thereto, but furnishing of opinion, skill or services being the essence of such transaction; (c) a person who— (I) acts only in a financial capacity with respect to the sale of the product; (II) is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic service provider; (III) leases a product, without having a reasonable opportunity to inspect and discover defects in the product, under a lease arrangement in which the selection, possession, maintenance, and operation of the product are controlled by a person other than the lessor;

   ^[4] Section 2(28) of The Consumer Protection Act 2019: “misleading advertisement” in relation to any product or service, means an advertisement, which— (i) falsely describes such product or service; or (ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or (iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or (iv) deliberately conceals important information;