Dark pattern guidelines impact on intermediaries: a regulatory khichadi

16th January, 2024 - 11:08 am Categories: Consumer Law Consumer Protection Authority Design 0 Comments

The Central Consumer Protection Authority issued the Guidelines for Prevention and Regulation of Dark Patterns, 2023 (‘Dark Pattern Guidelines’) on 30^th November 2023 to provide for prevention and regulation of dark patterns. The Dark Pattern Guidelines are introduced to protect the interests of consumers from the unfair practices adopted by various e-platforms and online companies.

What is dark pattern?

The term ‘dark pattern’ was introduced by Harry Brignull in 2010. It refers to certain User Interface/ User Experience Design (‘UI/UX’) crafted by the online companies to manipulate or deceive the users into making specific choices which may not be in their best interest. These tactics are adopted by different platforms to influence the choices of consumers for their own commercial gains. For instance, many times the shopping platforms like Amazon, Flipkart, etc. creates a sense of scarcity of certain products to create an impression in the minds of consumers that certain article is in great demand. Another practice is confirm shaming where platforms create a guilt in the mind of the user for not acting in a certain manner. For instance, Duolingo uses a crying owl figure when one leaves the services. Facebook and Google were found using dark patterns by confirm shaming, where they often pre-select the options or disable the privacy protection options without telling the user about the negative consequences of the same. These activities create a psychological barrier in the minds of user for not going through the checked boxes. Other examples of dark patterns could be nagging, trick questions, pre-selections, friend spam etc. The issue with these patterns are that they play with human psychology to drive profits. Since these dark patterns are cleverly crated to pop-up at intended situations, the experts have been calling them as “worryingly effective”. However most of the time intermediary platforms consider these tactics as business strategies rather than unfair trade practices.

Dark Pattern Guidelines

The Department of Consumer Affairs issued warning against platforms which are engaging into ‘unfair trade practices’ by implementing dark patterns in their user interfaces. The Department found these practices against the consumer rights under Section 2(9) of the Consumer Protection Act, 2019. In furtherance to that, the Department issued the aforementioned Dark Pattern Guidelines to regulate the dark patterns on e-platforms.

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These guidelines are applicable on ‘all the platforms’ offering goods and services in India, advertisers and sellers. The guidelines provide a wide definition of dark pattern under Guidelines 2(1) (e). The essential elements of dark patterns as given under the definition are, a) these are practices or deceptive design patterns; b) on any platform; c) the object of such practices is to mislead or trick the users to do something they are not initially intending to do; d) this is done by manipulating the consumer autonomy and decision making power of the user; and e) this would amount to unfair trade practice or violation of consumer rights. Further, the guidelines also provide for specified dark patterns under Annexure I of the guidelines. The specified dark patterns include false urgency, basket sneaking, confirm shaming, forced action, subscription trap, interface interference, bait and switch, drip pricing, nagging, trick questions, Saas billing and rogue malwares. All these practices are prohibited under Guideline 4, which provides for a blanket provision applicable on all persons including platforms.

Impact on intermediaries

The Guidelines defines the term ‘platform’ under Guidelines 2(1) (g) as the definition under Consumer Protection (E-commerce) Rules, 2020. These rules defines platform in a very broad manner as,

“An online interface in the form of any software including a website or a part thereof and applications including mobile applications.”

According to the report by Asia Internet Coalition (‘AIC’), the issue with this definition is that it includes all the intermediaries which are covered under the safe harbor protection under Section 79 of the Information and Technology Act, 2000. The E-Commerce Rules allows the safe harbor protection under Rule 5. However since the Dark Pattern Guidelines does not clarify the position of intermediaries, they can be held responsible for the actions of third party on their platforms. The experts suggested that this would also against the principle of ease of doing business. One of the main reasons is that since e-commerce platforms and internet intermediaries are governed by a bunch of different legislations under different sectors such as Information and Technology Act, 2000, Digital Personal Data Protection Act, 2023 and e-commerce rules. There is a greater chance of regulatory overlap with respect to dark patterns in India for these intermediaries. In order to protect the interest of intermediaries which are legal compliant with the safe harbor provision, the guidelines needs to include an exception for such intermediaries under the definition of ‘platforms’.

Further, different sectoral regulators have different ways of dealing with dark patterns and have already establish their respective legal framework. The Competition law prohibits unfair trade practices adopted by dominant players in a relevant market under Section 4 of the Competition Act, 2002. In Bharat Matrimony v. Google Inc., Google was found to manipulating the search algorithm in its favor and abusing its dominant position. CCI mentioned that such activities are prejudice to the interest of consumers. The dark patterns allow the platform to extract data from the user by way of indirect coercion. For instance, CCI initiated suo moto proceedings against Whatsapp for its privacy policy update, where it forced the users to compulsorily agree to share their data if they want to continue using the app. These instances show that, competition law is capable of dealing with the issues where online platforms engage in any dark pattern activities.

Digital Personal Data Protection Act, prohibits the data fiduciary to hold the data of an individual without their consent. The online platforms have to seek consent from the data principles through unambiguous notice before processing any data. The Fintech industry would have to review their interface and practice proper due diligence to avoid any compliance related issues. Since the DPDP Act does not govern ‘interfaces or designs’, after the Dark Pattern Guidelines, the industry would face a major concern with respect to balancing the user privacy and data personalization. The Fintech companies would have to conduct periodic audits to avoid any data breach. Along with that they should also educate their user about dark pattern issues and then obtain their consent in a legitimate manner with the help of build-in mechanisms/features like customizable settings, accessible privacy policy etc. The DPDP Act and the guideline must be interpreted properly to ensure there is adequate balance between consumer protection and platform autonomy.

Guideline 6 under the Dark Pattern Guidelines specifically mentions that the guidelines shall be interpreted in addition to any other law dealing with dark pattern and not in derogation of other laws. This means that the platform may be penalized under both the sectoral laws and dark pattern guidelines. At the same time it is also not always possible to unequivocally determine the practices that would violate “only” a specific legislation, thus cooperation among different sectoral authorities is required. Therefore, it seems that parallel application of existing sectoral framework and dark pattern guidelines would lead to jurisdiction related issues. Further according to Internet Freedom Foundation, this over-regulation and ambiguity between different laws may adversely affect the creativity and innovation of online intermediaries.

In order to deal with the issue of dark patterns efficiently, the experts have suggested the self-regulatory framework to be adopted by the internet intermediaries. The self-regulatory framework shall include, proper complaint and grievance redressal mechanism for the customers. The Advertising Standards Council of India, a voluntary self-regulatory organization which helps in timely redressal of complaints related to misleading advertisements, can collaborate with concern authority to develop a complaint mechanism for dark patterns. Along with that there shall be properly carved out parameters for penalization of different platforms on the basis of their intent to deceive and potential harm to the consumer.

Conclusion

The online world is expanding at greater pace and today the intermediaries can adopt millions of ways to exploit the consumers. Dark patterns are harmful not only for the consumers but also for the overall competition in the market. However it is noteworthy that while regulating the dark patterns the authority shall not compromise with creativity and innovation undertaken by the intermediaries. The regulators and self-regulatory organizations need to work in harmony to avoid any unnecessary overlap and keep the online experience for the consumers kosher.

Author: Arya Sharma, in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.