By Vikas Kathuria
Have you experienced a hidden fee while booking your last flight online? Or did the countdown timer push you to grab those running shoes that now lie untouched in your rack?
If the answer is yes, you have been a victim of ‘dark patterns’.
Dark patterns are deceptive techniques used by online platforms such as apps and websites to manipulate users’ behaviour without their knowledge or consent to maximise gains at the cost of consumers.
At the core of dark patterns is deception, enabled and amplified in digital markets due to the underlying technology known as User Experience (UX). The UX design is crafted in a way that makes it difficult to cancel a service, uses pre-checked boxes to automatically check in consumers, creates a false sense of urgency or uses emotive or misleading language to encourage a specific behaviour.
Dark patterns are a known danger in digital markets and have led several countries to act against them. For instance, India issued Guidelines for Prevention and Regulation of Dark Patterns in 2023, and declared dark patterns to be in violation of its Consumer Protection Act. This year, South Korea too prohibited dark patterns through regulation.
Indeed, there’s a case to be made for regulating dark patterns. This is because given the information asymmetry, consumers end up buying sub-optimal products — low on price, quality, not needed, or even harmful. For example, the “sneak into basket” design, where an item is added to the user’s online shopping cart without their explicit consent.
This line of action assumes that by prohibiting dark patterns, consumers will be adequately protected. But can the law alone ensure that consumers gain the maximum benefit from digital markets?
Even as it has attempted to prohibit dark patterns, the law has been silent on promoting bright patterns instead.
Bright patterns are “persuasive design solutions that prioritise user goals and well-being over their desires and business objectives”. In essence, they are the antithesis of ‘dark patterns’. For instance, a bright pattern could be ranking healthier products higher up in the search results on e-commerce platforms such as Amazon and Flipkart. Consumers tend to purchase products ranking higher in the search results list — this is simple behavioural economics. Promoting environmentally sustainable and circular products is another example of bright patterns.
Nudging for public interest
India has 260 million e-commerce users. This figure is expected to rise further. While digital markets present opportunities and advantages, they also throw up unprecedented challenges due to the underlying technology and corresponding user response. Against this backdrop, new interventions are required to ensure consumer well-being.
Promoting bright patterns is a good way to begin. Bright patterns are nudges, choice environments that make it easier for people to choose what is best for them. Nudges are not regulations or mandates, as there are no corresponding incentives or disincentives. It is ‘libertarian paternalism’, both by private and public actors, that gently steers individuals towards a desired action. For instance, placing healthy food in the front of the food counter is a nudge to promote healthy eating. Another example is telling commuters how many calories they would burn by taking the stairs at a metro station.
There are several examples of an organisation or a state nudging people towards optimal choices. A study conducted in India found that information to nudge households to decrease their electricity use, such as comparing their usage to that of peers and providing tips on how to conserve, helped reduce their electricity use by 7 per cent. Some e-commerce platforms use emotive language to convince their users to tip delivery partners.
But why should private actors use nudges to promote public interest?
Promoting nudging through private actors is possible only when public and private interests are aligned. For instance, Sweden attempted ‘green nudges’ in collaboration with private coffee shops to discourage single-use plastic cups. In the case of e-commerce, such incentives may not align, as ‘bright’ products may not be the most popular in the multitude of products being marketed.
Here, there is a case to be made for the state to intervene through regulation. The typical justification for such intervention would be market failures — market outcomes that are not optimal; for instance, wrong product choices because of asymmetric information. The top-ranking energy drink on a website, for example, may be high on caffeine and sugar, which may lead to anxiety and insomnia. But user reviews may miss out on such details that are crucial for health.
Moreover, this form of intervention is also a social regulation, which is not typically rooted in market failures, but is rather aimed at protecting public interests such as health, safety, the environment and social cohesion.
Another justification for regulations of this kind is the positive externalities of nudges. For instance, healthier societies would incur reduced healthcare costs. Besides, regulations can be prescriptive in nature. The case for nudges in e-commerce is even stronger as it exploits users’ past behaviour, including our biases, to make suggestions.
Amazon’s A10 algorithm that determines search rankings considers the following parameters: sales history, organic sales from the search page, seller’s feedback rating, click-through and conversion rate, among others.
Caveat against collusion
One of the challenges of private ordering by market players — when individual parties agree on how to police an activity, rather than relying on government regulation — is that it often leads to self-serving behaviour.
These platforms may use nudges as a proxy to maximise their gains. Online platforms getting to decide what is good for consumers creates the possibility of collusion between product manufacturers and e-commerce platforms. This, in turn, may raise further concerns for competition law and consumer protection laws.
To tackle this, there can be objective criteria laid down through a participatory process involving stakeholders such as product manufacturers, experts and civil society.
To some extent, there are precedents that might hold clues for doing this. For instance, India has the Food Safety and Standards (Labelling and Display) Regulations, 2020. This regulation mandates that a list of ingredients and additives shall be declared on the label. Through a participatory process, manufacturers and online retailers could use this information to rank products within specific categories. For instance, a sugary or caffeine-laden drink would be placed under the category of “beverages”, instead of the category of “health food”.
Interventions such as promoting bright patterns will result in regulatory costs for both the state and private players. These costs are, however, justified given the short-term gains in public interest goals such as health, safety, environmental consciousness and sustainability, and the long-term gains accrued by ensuring consumer trust in free markets.
Vikas Kathuria is Professor, BML Munjal University, Haryana. He also directs the Academic Society for Competition Law (ASCOLA), India chapter. His research interests include competition law, law and technology, data governance, and law and economics.
Originally published under Creative Commons by 360info™.
