Can the recent guidelines effectively regulate deceptive designs in India? Here's our take.

This post discusses the key comments and policy recommendations for the prevention and regulation of deceptive design patterns or ‘dark’ patterns in the Indian digital landscape.

A typical day for most of us is filled with diverse online interactions. From the early morning ritual of checking social media updates and catching up on news to ordering breakfast through a food delivery app, the day begins and ends in the digital realm. Work and communication span across virtual meetings, emails, and collaborative platforms, blurring the lines between physical and online presence. Online shopping for household essentials, researching health information, OTT streaming, and UPI transactions punctuate the day. However, these interactions, while convenient, come at a cost. Through these interactions, very often consumers are susceptible to the subtle influences of deceptive design practices, shaping decisions in ways they may not even realize. 

The prevalence of deceptive design patterns, often referred to as "dark patterns," has raised concerns globally over the past decade. Regulatory authorities in India have also started to take note. In September 2023, The Department of Consumer Affairs, Government of India published Draft Guidelines for Prevention and Regulation of Dark Patterns and sought comments from the industry. This blog highlights the key comments and recommendations prepared collaboratively between D91 Labs and The Pranava Institute in response to the public call for comments.

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‘Dark’ Patterns, Consumer Protection and Fintech

The Indian government's draft guidelines are a welcome move in response to the growing influence of dark patterns also known as deceptive design patterns across various sectors of the digital economy. These patterns involve designing interfaces that trick users into taking actions that may not be in their best interest but benefit the businesses behind them. While the use of persuasion techniques in advertising is not new, dark patterns demand regulatory attention due to their widespread impact on digital interactions.

The regulation of deceptive design is not just about protecting consumers; it's also about ensuring that India's most vulnerable online users are not harmed or misled. It's about enabling access to public utilities, government services, and participation in the digital economy without manipulation, for the Bharat cohort. With 56% of new internet users likely to be from rural India by 2025¹, ethical design practices must be promoted to protect more vulnerable user groups.

This has implications for India’s fintech revolution too. Convenience and accessibility have become synonymous with digital financial services in India. However, beneath the surface of user-friendly interfaces lies a growing concern—the prevalence of deceptive design practices. These practices manipulate user behaviour and choices in subtle yet impactful ways. While not all fintech players engage in such tactics, some have resorted to deceptive design to maximize their profits, sometimes at the expense of consumer trust and financial well-being.

These patterns typically serve two main purposes for fintech businesses:

1. Maximizing the sale of their products or services.

2. Maximizing the collection of personal information from users.

While financial harm from deceptive patterns is most tangible, there are several other types of harm that a consumer can experience. D91 Labs conducted a detailed UX audit of popular apps as part of our study to understand the incidence and prevalence of deceptive patterns in Indian fintechs.

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A Case for Promoting Ethical Design Practices

With one of the largest and fastest-growing fintech startup ecosystems In the world, India will need to address the challenges of deceptive design practices that are prevalent. Policy and regulation around deceptive practices will enable India to push innovation and entrepreneurship along with creating a safe cyberspace for all.  Promoting and incentivizing ethical design in fintech, apart from just being a regulatory requirement can also make good business sense. Here's why:

1. Consumer Protection: Ethical design ensures that fintech products and services prioritize the well-being and interests of users. It safeguards consumers from financial harm, privacy breaches, and manipulation.

2. Trust and Reputation: Fintech companies that prioritize ethical design build trust with their users. Trust is a valuable currency in the digital economy and can lead to sustained business growth.

3. Inclusive Growth: Ethical design promotes financial inclusion by making digital interfaces more accessible and user-friendly. It reduces the barriers faced by disadvantaged population groups, enabling them to benefit from fintech services.

4. Long-Term Viability: Fintech businesses that embrace ethical design are more likely to thrive in the long run. By fostering a culture of responsible and user-centric design, they future-proof their operations against regulatory crackdowns and public backlash.

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An Overview of our Suggested Policy Recommendations

To address this issue comprehensively, in collaboration with the Pranava Institute, we presented a set of policy recommendations aimed at promoting transparency, consumer protection, and ethical design in the digital ecosystem.

1. Expanding the Taxonomy of Deceptive Patterns Periodically:

   While the draft guidelines are a step in the right direction, they should consider incorporating additional sub-categories of deceptive patterns. These include forced disclosure, friends spam/address book leeching, false hierarchy, misleading reference pricing, preselection, social proof, and testimonials. Expanding the guidelines ensures a more comprehensive approach to tackling ever-evolving deceptive design practices.

2. A Consumer Harms-Centered Regulatory Approach:

   As deceptive design patterns continue to evolve, a harm-centered regulatory approach proves more effective than merely banning specific patterns. Harms are the end outcomes of employing deceptive patterns. We recommend prioritizing principles such as privacy, enabling access and inclusion, fair competition, and transparency. These principles should serve as the foundation of digital regulations, including those addressing deceptive design.

3. Public Reporting Tools and Studies:

   To deepen our understanding of deceptive design harms in the Indian context, setting up public reporting tools and a crowdsourcing approach is vital. A centralised consumer portal for voluntary reporting of deceptive patterns can provide real-time insights. Additionally, investigations and studies documenting the specific harms of deceptive design will support proactive regulatory measures.

4. Independent Design Audits and Ethical Design Incentives:

   Significant fintech platforms and intermediaries should undergo annual design audits by independent third-party experts to identify deceptive design practices. Additionally, they should conduct annual awareness and sensitization measures to promote ethical design practices. To incentivize ethical design, mechanisms like app store ratings for ethical design and certifications from industry bodies can be implemented.

5. Incentivizing the use of Ethical Design practices:

   When the evolving nature of the problem, preventing and regulating deceptive design practices may not always be an enforceable position. In this regard, it is suggested to include mechanisms that incentivize employing ethical design practices. To encourage ethical design practices, similar to how car crash safety ratings have made safety features more desirable for both consumers and car manufacturers, various mechanisms can be implemented. These measures can include both market-driven incentives and formal regulatory frameworks.

6. Coordinated Approach from the Government

   Deceptive design practices span various sectors in the digital economy. While the Consumer Protection Ministry leads in regulating deceptive design, a coordinated government approach is needed. Sector-specific regulators and self-regulatory bodies should play a role in addressing domain-specific issues arising from deceptive design. Multiple regulatory bodies must collaborate to safeguard citizens' interests and ensure a fair, transparent, and ethical digital economy.

India can take substantial steps toward combatting deceptive design practices by putting some of these recommendations into action. Read our full report for a comprehensive understanding of our response to the Guidelines.

1. https://www.thehindubusinessline.com/news/56-of-new-internet-users-to-be-from-rural-india-by-2025-report/article67282295.ece