Background

The Advertising Standards Council of India (“ASCI”) issued ‘Guidelines for Online Deceptive Design Patterns in Advertising‘ (“Guidelines”) on June 15, 2023, to regulate dark patterns in advertising. ASCI has released the Guidelines under the Code for Self-Regulation of Advertising Content in India, in connection with the requirements for advertisements to be honest and not abuse consumers’ trust.

The Guidelines are further to the discussion paper on ‘Dark Patterns – the New Threat to Consumer Protection’ issued by the ASCI late last year.

Dark Patterns, now a common practice, is manipulation of UI / UX designs and online choice architectures that guide consumer choices online, including over digital marketplaces. It has been a cause of concern for the ASCI and Department of Consumer Affairs, prompting the issuance of the Guidelines to curb dark patterns. The Guidelines are an attempt to ensure consumers are not forced or directed to unintended consequences, without express consent or by obtaining consent by deceit.

Concept of Dark Patterns

While recognising the difficulty in developing a universally accepted definition of dark patterns, ASCI has borrowed the one under the OECD Committee on Consumer Policy, which is:

“Dark commercial patterns are business practices employing elements of digital choice architecture, in particular in online user interfaces, that subvert or impair consumer autonomy, decision-making or choice. They often deceive, coerce or manipulate consumers and are likely to cause direct or indirect consumer detriment in various ways, though it may be difficult or impossible to measure such detriment in many instances.”

As the definition suggests, dark patterns involve methods and online user interfaces that are designed in a manner to manipulate and direct consumers to make choices detrimental to their interest.

Applicability

The Guidelines apply to all advertisements in digital media, including e-commerce, airline, food delivery, etc. apps and websites. While the Guidelines do not define ‘digital media’, the definition under the Guidelines For Influencer Advertising In Digital Media (“Influencer Guidelines”) can be a reference point. In terms of Influencer Guidelines, digital media is means of communication that can be transmitted over internet or digital networks and includes communication by or through a digital media platform. Accordingly, digital media will cover internet, on-demand platforms (like video-on-demand), mobile broadcast, digital home entertainment and terrestrial television, etc.

Requirements introduced under the Guidelines

1. Drip Pricing:

To ensure transparent pricing for consumers, the Guidelines prohibit ‘drip pricing’, which is a practice of not revealing certain elements of prices upfront and informing of final price at end of transaction process or post-confirmation of purchase. Such incomplete price representations upfront clearly amount to misleading consumers, and therefore, the Guidelines require all charges, common for all or most consumers, to be included in the price displayed on the advertisement or listing of goods or services.

This is intended to curb practice of first luring consumers to purchase goods or services by showing a lower price and later disclosing or adding certain incremental costs at the time of check-out. Clearly, a materially misleading practice.

As a result of this condition, the prices quoted in advertisements and e-commerce websites (including for listings) must now upfront include all non-optional taxes, duties, fees and charges, which are applicable to all or most of buyers. Some examples include taxes, delivery fees, platform convenience fees, etc.

Interestingly, the Consumer Protection (E-Commerce) Rules, 2020, require sellers to share the total price of any good or service in a single figure with the e-commerce entity that has to prominently display such information along with the break-up price that shows all compulsory and voluntary charges (such as delivery charges, postage and handling charges, conveyance charges and applicable taxes). The Guidelines go a step further by extending this obligation to even advertisements.

2. Bait and Switch:

The concept of misleading advertisement has been expanded for the virtual world, since it is quite common for customers to experience ‘bait and switch’ in today’s world. This happens when an advertisement presents one option to entice consumers, but later it is replaced with a different one that may be of lower quality or with compromised specifications. An example would be when a consumer selects a product at a particular price but it can only be purchased at a higher price or it is replaced with a substitute product.

An advertisement (or any element in it) that implies one outcome on a consumer’s action, but serves an alternative outcome, will be a misleading advertisement in terms of the Guidelines.

This condition of the Guidelines, thus, imposes an obligation on the advertisers to ensure that the exact product (including specific model, price or other specifications) that was shown in the advertisement is made available to consumers.

Also, another practice in advertising which is being targeted by the Guidelines as being misleading, is where the meaning of key symbols used in an advertisement may be changed to mean an opposite or unintended action. As an example, it would be a misleading advertisement, if the symbol ‘X’ on the top right corner of an advertisement (commonly understood to mean the action to ‘close’ the advertisement), results in opening of an app instead of closing the advertisement. The Guidelines require advertisers to not change the result or action denoted by a symbol that is commonly used and understood as being signified by that symbol.

3. False Urgency:

We have all seen advertisements boldly and repeatedly proclaiming “limited stock” or “limited availability of airline tickets”. A practice that creates a false sense of urgency or scarcity to pressurize consumers to make or accelerate their purchases by portraying that there is more limited availability of stock than its actually availability, will be considered misleading.

The ASCI has prescribed a mechanism to address such situations and advertisers will need to demonstrate that at the time when the message about limited quantity appeared, there was actually limited quantity available, and its availability was at levels that could justify that the urgency was not misleading.

Steps like these are an important move towards ensuring truthfulness in advertisements, and prevent circulation of misleading and false information to lure consumers or induce them to make instantaneous purchase, without exercising free choice and discretion.

4. Disguised Advertisements:

With a view to curb the menace of disguised advertisements, advertisers must ensure that publishing of advertisements in a format like editorial or organic content must clearly disclose it is an advertisement. As the name suggests, disguised advertisements are those that are designed to look like other types of content, such as news articles or user generated content.

This is a move to ensure segregation between influencer posts, paid reviews and advertisements on one hand, from editorial content, for clarity of the viewers. The condition addresses the lack of separation of the two forms of content, i.e., editorial or organic content versus advertisement or paid-for content, resulting in advertisements to seem like organic content. It will be an important step since unlike other content, advertisements are driven by commercial gain and business factors, to influence consumers’ choice.

In this context, the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (“Misleading Ad Guidelines”) mandate endorser of a good or service to disclose material connections with the manufacturer, advertiser or trader, that materially affects value or credibility of the endorsement. Also, the Influencer Guidelines prescribe similar requirements for influencers.

Guidelines – a step in the right direction

The Guidelines have been issued under the collaborative effort of the Department of Consumer Affairs and the ASCI. It is an attempt to give paramount importance to protection of consumers, since deceptive patterns that manipulate consumer choice and impede consumer’s right to be well informed constitute unfair practices, which are prohibited under the Consumer Protection Act, 2019. These come into effect from September 1, 2023.

In one of the earlier press releases, multiple categories like online shopping, e-ticketing, restaurant and travel, were examined for countering dark patterns. The Guidelines have prescribed conditions for the most commonly deployed dark patterns. The measures will require the digital players to take steps to eliminate dark and deceptive patterns from advertisements and work towards a consumer-friendly digital choice architecture.

Interestingly, ASCI was considering an additional measure for the framework to equip consumers with tools or tech solutions (such as browser extensions or plugins that detect and block dark patterns) to allow them to make informed and unbiased choices. While these measures did not find a place in the Guidelines, it may be interesting to see if ASCI decides to empower consumers through such tools in the future, in addition to the present restrictions on advertisers.