Dark patterns are user interface designs that nudge, pressure or mislead consumers into making choices they may not have intended to make. These can include practices such as hidden charges, false urgency, subscription traps, difficult cancellation processes, misleading default settings, confirm shaming and other interface designs that influence purchasing or consent decisions.
The Central Consumer Protection Authority (CCPA) issued guidelines in 2023 identifying and prohibiting such practices.
Also read: Anti-dumping duty: Is there a communication gap between the DGTR and CBIC
The recommendation comes as SEBI has proposed a Common Advertisement Code (CAC) for regulated financial entities that explicitly prohibits the use of dark patterns in advertisements and investor communications by incorporating the Central Consumer Protection Authority’s (CCPA) 2023 guidelines.
While calling the proposed code a positive first step, LocalCircles argued that it should extend beyond advertising and cover companies’ consumer-facing digital operations as well.
According to the study, only five publicly listed companies with consumer-facing online transaction platforms, including Meesho, Page Industries-owned Jockey, Reliance Retail’s Hamleys, ECOS (India) Mobility & Hospitality and Easy Trip Planners, were found to be free of dark patterns.
The findings are based on consumer complaints received over the past year, public social media complaints and LocalCircles’ proprietary AI-powered dark pattern detection tool, which analysed more than 310 digital platforms.
The organisation said manipulative practices were detected across subscription renewals, cancellation processes, pricing displays, consent mechanisms and behavioural nudges used during online transactions.
LocalCircles also questioned the effectiveness of voluntary self-certification. It said that of 23 companies that had submitted “dark pattern-free” declarations to the CCPA after conducting self-audits, only seven were actually found to be free of deceptive practices.
Also read: Instagram child safety controversy explained: What happened and why it matters
Among the most common dark patterns identified, “forced action” appeared on 72% of platforms analysed, followed by drip pricing (65%), interface interference (52%), bait and switch (52%), nagging (36%) and subscription traps (33%), according to the study.
Sector-wise, LocalCircles found the highest prevalence of dark patterns in digital lending, edtech, online banking, e-commerce, OTT platforms, app-based taxis, food delivery, online grocery, travel, online payments and online gaming, among others.
The organisation said it had shared a framework for a “dark pattern-free” self-declaration with SEBI earlier this year at the regulator’s request. It argued that as digital business practices become an increasingly important corporate governance issue, companies seeking to list, as well as those already listed, should disclose that their consumer-facing platforms are free of manipulative interface designs.
