Dark Patterns in Digital Contracts: Consumer Exploitation

Dark Patterns in Digital Contracts: Consumer Exploitation 

Introduction 

In the digital age, user interfaces are strategically designed to influence user behaviour, raising concerns about "dark patterns" – deceptive designs that manipulate users into unintended choices. These patterns undermine consumer autonomy and present ethical, legal, and regulatory challenges. As India's digital ecosystem expands rapidly, the legal system is adapting to address this manipulation. This article examines the growing problem of dark patterns, their legal treatment in India and globally, and the necessity for enhanced digital consumer protection. 

Understanding Dark Patterns 

Dark patterns are intentionally deceptive UI designs that manipulate or mislead users into actions they might not otherwise take, such as service sign-ups or sharing personal data. These designs exploit cognitive biases to push users towards outcomes that benefit businesses, often at the user's expense.  

Common examples include: 

• Bait and switch: Advertising a low price, only to switch at checkout.  

• Forced continuity: Making subscription cancellations complex.  

• Hidden costs: Adding unexpected charges late in the checkout process.  

• Trick questions: Using confusing wording to manipulate consent.  

• Confirmshaming: Guilt-tripping users for opting out.  

Regulatory and Legal Frameworks 

India's regulatory framework for dark patterns is evolving, with existing laws providing some safeguards.  

• Consumer Protection Act, 2019: The Central Consumer Protection Authority (CCPA) introduced the Guidelines for Prevention and Regulation of Dark Patterns, 2023, effective November 30, 2023, under this Act. These guidelines apply to all online platforms, sellers, and advertisers, aiming to curb deceptive UI designs that mislead or pressure users. Prohibited practices include creating fake urgency, confirmshaming, auto-adding items to carts, hiding costs (drip pricing), and obstructing subscription cancellations. These tactics are classified as unfair trade practices under Section 2(47) of the Act, allowing authorities to act, including fines and modifications.  

  
  

  1. In Jatin Bansal Vs. Amazon Re-seller Services Pvt. Ltd. and Ors., the court held that dark patterns and phishing constitute unfair trade practices, ordering a refund and compensation.  

     
     

Indian Contract Act, 1872: Dark patterns can violate the requirement for free, informed consent. Section 19 defines consent as agreement on the same thing in the same sense, and specifies that consent is not free if caused by coercion, undue influence, fraud, or misrepresentation. Manipulative UIs that obscure terms can constitute misrepresentation or undue influence, rendering contracts voidable under Section 19. In practical terms, a manipulative UI that obscures material terms or misleads the user could constitute misrepresentation or undue influence, rendering the contract voidable under Section 19. Section 19 provides: “When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused” 

• Competition Act, 2002: Dark patterns can have anti-competitive effects. Section 3 prohibits anti-competitive agreements, and Section 4 forbids dominant firms from abusing their position. Examples include "basket sneaking," subscription traps, and forced continuity.  

Legal commentators have mapped classic dark patterns onto these prohibitions. For example,“basket sneaking” (adding unwanted items at checkout) imposes unfair conditions on a sale (violating Sec 4(2)(a)(i)), subscription traps (making cancellation tortuous) hinder switching and innovation (violating Sec 4(2)(b)(ii)), and forced continuity (requiring ancillary purchases to get a product) imposes unrelated supplementary conditions (violating Sec 4(2)(d)).  

Thus, a dominant platform using dark-pattern UI to lock in users or steer them unfairly could be seen as abusing dominance. Indeed, the CCI has shown sensitivity to “non-price” abuses: in Bharat Matrimony v. Google (2018) the Commission held Google abused dominance by self-preferencing its services (noting that free search is paid for by user data).  

The CCI’s Chair has since observed that dark patterns raise “competition implications” (noting how users can be “conditioned” by design choices) and even warned of potential “algorithmic collusion” as an anti-competitive form of collusion. The CCI has scrutinized e- commerce. Following a 2019 complaint by the Delhi Vyapar Mahasangh (CAIT affiliate), CCI’s Director General opened a formal probe on January 13, 2020 into Amazon and Flipkart for alleged exclusive vertical arrangements, deep discounts and preferential listings favoring certain sellers.  

The allegations centered on anti-competitive coordination (such as exclusive product launches and pricing) rather than interface design per se, but illustrate how platform- favored deals distort competition. Meanwhile, sectoral regulators have flagged dark patterns directly. The Confederation of All India Traders (CAIT) formally complained (July 2023) to the CCI that Amazon was using dark patterns to “force” Prime subscriptions and make cancellations “next to impossible,” calling this an anti- competitive practice. Notably, India’s Central Consumer Protection Authority (CCPA) has also begun enforcement: in late 2024 it served notice to Amazon India under the Consumer Protection Act for enrolling users into Prime without valid consent via dark-pattern interfaces. 

1. In Bharat Matrimony v. Google (2018), the CCI held that Google abused its dominance by self-preferencing its services.  

2. The CCI is also investigating e-commerce platforms like Amazon and Flipkart for alleged anti-competitive practices.  

3. The Confederation of All India Traders (CAIT) has complained to the CCI about Amazon's alleged use of dark patterns to force Prime subscriptions.  

4. The CCPA has also acted against Amazon India for enrolling users into Prime without proper consent.  

• Information Technology (IT) Act, 2000: Sections 66C and 66D address fraudulent use of computer resources and identity theft, with penalties including imprisonment and fines. Section 72 penalizes breaches of confidentiality and privacy.  

  
  

  1. In Pankaj Chandgothia Vs. The Coffee Bean & Tea and Ors., the court ordered the deletion of personal information, cessation of unfair practices, and payment of compensation. 

     
     
     
     

Competent Authority 

In India, the CCPA is the primary authority for addressing dark patterns, with powers to conduct inquiries and impose penalties. Consumer redressal occurs through District Commissions, State Commissions, the National Consumer Dispute Redressal Commission (NCDRC), and the Supreme Court.  

Dark patterns are no longer mere design flaws or oversights. They are calculated, tested, and deployed at scale by corporations—often with deep pockets and dominant market positions—to extract value from unsuspecting users. What makes these practices legally and ethically troubling is that they exploit asymmetry of bargaining power and information. The consumer is often presented with a contract or user interface that appears routine but conceals one-sided terms, or leads them into choices that they neither intended nor fully understood. 

Dark Pattern Trends & Industry Patterns 

Dark patterns are intentionally designed to exploit power and information imbalances.  

Examples include: 

• One-Sided Contracts in Insurance and Financial Services 

  
  

A common instance arises in the insurance industry. Take for example, health or term insurance policies offered through leading aggregators. Consumers often select plans based on premium costs shown on comparison portals, only to later discover—usually at the time of claim—that the policy excluded pre-existing diseases, maternity cover, or had waiting periods that were not prominently disclosed. These are not just oversights—they are examples of hidden clauses, where critical information is either buried deep within the terms or phrased in legal jargon to deflect attention. The average consumer, often in distress or need, signs these agreements under the assumption of good faith, only to later realize the contract was structurally one-sided, favoring the insurer entirely. 

• Cab Aggregators and Algorithmic Discrimination 

Another prevalent example is the discriminatory pricing mechanisms used by ride- hailing platforms. There have been instances where the ride fare of cabs has been different on multiple devices for the same destination, route and even time. This is not an isolated issue; fare manipulation based on user data, device model, or travel historyis a dark pattern rooted in personalized price discrimination. Consumers have no means to verify how these prices are calculated, and no opportunity to contest them— highlighting a textbook case of information asymmetry and lack of bargaining power. 

• Airfare Inflation Based on Search History 

  
  

Similarly, during festive seasons or long weekends, flight aggregators display artificial scarcity ("Only 1 seat left at this price!") and dynamic price surges that often rise the moment a user checks the same ticket twice. This false urgency and price fluctuation is orchestrated not by demand alone but also by cookies and algorithms tracking user behavior. This psychological manipulation coerces consumers to buy under pressure, fearing further price jumps—a classic case of false urgency and baiting tactics. 

In the Suo Moto case, the CCPA took action against InterGlobe Aviation Ltd. (IndiGo)10 following numerous consumer complaints about unfair seat allocation, confirm shaming, lack of transparency in seat selection during web check-in, and poor customer service. IndiGo defended its practices, stating that seat selection is an optional, DGCA-approved unbundled service, and that all 813 complaints were resolved. The airline also modified its app language to remove manipulative prompts. However, CCPA found that the web check-in process lacked a clear, unambiguous notice that consumers could skip paid seat selection. Accordingly, IndiGo was directed to ensure compliance with DGCA’s circular by clearly informing passengers that web check-in can be completed without choosing a paid seat and to submit a compliance report within 15 days. 

• E-Commerce Platforms and "Consent Laundering" 

  
  

Most consumers don’t realize that by simply browsing an e-commerce website, they often consent to terms allowing the platform to use their personal data, shopping habits, and even track behavior across apps. Opt-out buttons are often hidden behind multiple clicks or confusing jargon—a design choice referred to as a “roach motel”, where entering is easy, but exiting is made deliberately difficult. Subscription models often auto-renew, and cancellation requires navigating complex menus or calling helplines that rarely connect—a common subscription trap. 

• Overpricing of Online Products 

  
  

In the realm of Indian e-commerce, dark patterns frequently manifest through the deceptive overpricing of products by way of concealed charges that emerge only at the final stage of the transaction. While products are initially displayed at seemingly competitive prices, consumers often encounter unexpected additions—such as service fees, packaging costs, or inflated delivery charges—only during checkout. This strategy capitalizes on the consumer’s psychological commitment to the purchase after investing time in the selection process, thereby nudging them to complete the transaction despite the price escalation. Such practices amount to misleading representations and are actionable under the Consumer Protection Act, 1986, which empowers the Central Consumer Protection Authority (CCPA) to take regulatory action against unfair trade practices, including those arising from the use of dark patterns in digital commerce.11 

Global Standards on Dark Patterns 

Several global jurisdictions are addressing dark patterns.  

• United States: The FTC considers dark patterns as deceptive and unfair practices.  

  • Amazon was investigated for complex Prime cancellation processes.  

  • Epic Games was fined for using dark patterns and violating children's privacy.  

• European Union: The GDPR requires explicit consent, invalidating consent obtained through dark patterns. The Digital Services Act prohibits dark patterns.  

• Australia: The ACCC has acted against platforms for deceptive designs like drip pricing.  

These global efforts demonstrate a growing consensus against dark patterns.  

Suggestions & Conclusion 

Recommendations include: 

• Improving pricing transparency on e-commerce platforms.  

• Implementing consumer awareness programs.  

• Imposing stricter penalties and monitoring e-commerce platforms.  

Addressing dark patterns is essential for protecting consumers and fostering trust in the digital marketplace. This requires legal evolution, consumer education, and robust enforcement.