Secure And Fair: On E-Commerce Trade Practices And Regulation

Relevance: GS2 - Government policies and interventions for development in various sectors and issues arising out of their design and implementation; GS3 - Cyber Security, Awareness in the fields of IT, and Computers,

(Source: The Hindu, 09/14/2023)

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Why in the news?

• Recently, the Government of India introduced new guidelines to prevent and regulate dark patterns.
• Dark patterns amount to misleading advertisements or unfair trade practices or a violation of consumer rights.

What are dark patterns?

• Dark patterns are deceptive or manipulative user interface designs or techniques employed by websites, apps, or other digital platforms to trick or mislead users into taking actions they might not have intended or desired.
• The term was coined by ‘user experience researcher’ Harry Brignull in 2010.
• They are designed to benefit the platform or service provider at the benefit of the customer or user.

Evolution

• Initially, there was a lack of clarity about the impact of dark patterns on privacy, time, energy, spending, and consumer awareness.
• Since then, dark patterns have become more common and widespread.
• Common examples include:
  • Automatic purchase of travel insurance while booking flight tickets;
  • Mandatory requirement of emails or phone numbers to access e-commerce sites
• Today, there is greater awareness about the surplus profit-making methods employed by e-commerce companies.
• This has led to governments introducing new regulations to protect customers and restrict predatory trade practices.

Widespread Use of Dark Patterns

• According to estimates, nearly 50% of e-commerce sites use dark patterns to sell their products.
• Technological giants systematically collect digital behavior footprints of users to sell either their own or third-party products, resulting in profits larger than the GDP of some countries.
• India’s efforts so far to regulate the sector have been confined to preventing tax leakages and protecting the interests of brick-and-mortar merchants.
• According to a study by the Advertising Standards Council of India (ASCI), 29% of the ads published on social media by influencers between 2021 and 2022 had misleading dark patterns.

What are some of the regulations on dark patterns which have been introduced by countries?

Europe

• In March 2022, the European Data Protection Board issued guidelines on recognizing and avoiding dark patterns on social media platforms.
• It defines “dark patterns” as interfaces and user experiences implemented on social media platforms that lead users to make unintended, unwilling, and potentially harmful decisions regarding the processing of their personal data.

U.S.A.

• In September 2022, the U.S. Federal Trade Commission warned of an increase in sophisticated dark patterns that are designed to trick and trap customers.

India

• In 2023, the Union Ministry of Consumer Affairs issued a set of draft guidelines on dark patterns used by platforms to deceive customers.
• It defines dark patterns as deceptive practices or design patterns that use user interface or user experience interactions on any platform to mislead or trick users into doing something they originally did not intend or want to do.
  • It works by subverting or impairing the autonomy of the consumer.
• The guidelines also mention specific types of dark patterns such as forced action, drip pricing, bait and switch, etc.
• The guidelines will be applicable to all online platforms and persons including sellers and advertisers who are prohibited from engaging in dark patterns.
• Any person or platform will be considered to be engaging in a dark pattern if it engages in any practice specified in the guidelines.
• In case any of the guidelines are contravened, the provisions of the Consumer Protection Act, 2019 will be applicable.

To know more click the link.

Types of dark patterns

• False Urgency: This is a strategy in which time pressure or scarcity is used to push consumers into making a purchase or taking a specific action.
  • User choices can be manipulated by stating that the quantities of a product are limited.
  • E.g.: False claims to promote consumer urgency like “Only 2 rooms left! 30 others are looking at this right now.”
• Basket Sneaking: This refers to the use of manipulative design patterns by websites or apps to add extra items or services to a user's shopping cart without their explicit consent.
  • This does not include complimentary samples, free samples, and necessary charges like delivery fees which are explicitly mentioned to consumers.
  • E.g.: Automatic addition of travel insurance when purchasing a flight ticket.
• Subscription Traps: This refers to tactics that make it easy for consumers to sign up for a service but intentionally difficult for them to cancel.
  • Concealing the cancellation option
  • Ambiguous or complex cancellation process.
  • Forcing users to provide payment details for auto-debits to avail of free subscriptions.
• Confirm Shaming: This involves the use of guilt or criticism via phrases, videos, or audio to manipulate consumers into acting a certain way by making them feel ashamed for not conforming.
  • E.g.: Phrases like “I will stay unsecured” when not including insurance while purchasing vehicles
• Forced Action: It is the act of coercing consumers into taking an action they may not desire, such as signing up for a service in order to access content or functionality.
  • E.g.: Forcing users to subscribe to a newsletter in order to purchase a product.
• Nagging: It refers to persistent and annoyingly repetitive criticism, complaints, or requests for action that are aimed at pressuring consumers into taking a specific course of action.
  • E.g.: Constant request to turn on notifications with no option to say “NO”.
• Interface Interference: It is a tactic as a part of which consumers find it difficult to perform certain actions, like canceling a subscription or deleting an account, by deliberately creating obstacles or confusion in the user interface.
  • E.g.: Designing a light-colored option to select “No” in response to a pop-up asking a user if they wish to make a purchase
• Bait and Switch: It involves advertising a particular product or service but delivering something different, often of lower quality, deceiving consumers who were attracted by the initial offer.
  • E.g.: Sellers offer quality products at a cheap price but when the consumer is about to pay, the seller states that the product is no longer available and instead offers a similar-looking but more expensive product.
• Disguised Ads: This refers to posing or masking advertisements as other types of content such as user-generated content, new articles or false advertisements.
• Hidden Costs: This is a strategy in which additional expenses are intentionally hidden from consumers until they are already committed to making the purchase, leading to unexpected or higher costs.

What are the concerns associated with dark patterns?

• User Manipulation: Dark patterns exploit cognitive biases and behavioral psychology to manipulate users into making decisions they may not have otherwise made.
  • This undermines user autonomy and leads to undesirable outcomes.
• Unintended Purchases or Subscriptions: Dark patterns are used by e-commerce websites to trick users into making unintended purchases or subscribing to services.
• Privacy Concerns: Dark patterns are used to obtain users' personal information and consent for data collection without their full understanding by obfuscating privacy settings, and making it difficult to unsubscribe from marketing emails.
  • As a result, users unintentionally share more personal data than necessary.
• Ethical Concerns: Dark patterns exploit users' vulnerabilities for business profits, which is unethical.
  • This can damage a company's reputation and lead to legal proceedings if any consumer protection laws or regulations are regulated.

Conclusion

• There has been a new-found focus on consumers and a wider approach to privacy safeguards particularly in relation to personal data on e-commerce sites and social media platforms.
• This will help boost user confidence and ensure a safe, secure, free, and fair digital environment.

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FAQs

MCQs

Question: In India, it is legally mandatory for which of the following to report on cyber security incidents?

1. Service providers
2. Data centres
3. Body corporate

Which of the above is/are correct? (UPSC CSE 2017)

(a) 1 only

(b) 1 and 2 only

(c) 3 only

(d) 1, 2 and 3

Question: In India, under cyber insurance for individuals, which of the following benefits are generally covered, in addition to payment for the loss of funds and other benefits? (UPSC CSE 2020)

1. Cost of restoration of the computer system in case of malware disrupting access to one’s computer.
2. Cost of a new computer if some miscreant wilfully damages it, if proved so.
3. Cost of hiring a specialized consultant to minimize the loss in case of cyber extortion.
4. Cost of defense in the Court of Law if any third party files a suit.

Select the correct answer using the code given below :

(a) 1, 2 and 4 only

(b) 1, 3 and 4 only

(c) 2 and 3 only

(d) 1, 2, 3 and 4