What Regulation Should (and Shouldnโt) Do in Regulating Retail Nudges
๐๐ฐ๐ต ๐ข๐ญ๐ญ ๐ฏ๐ถ๐ฅ๐จ๐ฆ๐ด ๐ฎ๐ช๐ด๐ญ๐ฆ๐ข๐ฅ, ๐ค๐ฐ๐ฏ๐ด๐ถ๐ฎ๐ฆ๐ณ ๐ฆ๐ท๐ช๐ฅ๐ฆ๐ฏ๐ค๐ฆ ๐ฑ๐ฐ๐ช๐ฏ๐ต๐ด ๐ต๐ฐ ๐ต๐ฉ๐ฆ ๐ฏ๐ฆ๐ฆ๐ฅ ๐ง๐ฐ๐ณ ๐ฑ๐ณ๐ฐ๐ฑ๐ฐ๐ณ๐ต๐ช๐ฐ๐ฏ๐ข๐ต๐ฆ ๐ณ๐ถ๐ญ๐ฆ๐ด ๐ฐ๐ฏ ๐ณ๐ฆ๐ต๐ข๐ช๐ญ ๐ฅ๐ฆ๐ด๐ช๐จ๐ฏ ๐ต๐ข๐ค๐ต๐ช๐ค
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Meghna Bal: Esya Centre
SDG 12: Responsible Consumption and Production
Institutions: Ministry of Consumer Affairs | Central Consumer Protection Authority
Nearly 40 percent of Indian consumers say that so-called โdark patternsโ in online retail have improved their shopping experience. That finding, from a recent survey in ten cities, offers a surprising counterpoint to the current regulatory momentum focused on curbing these design practices.
Dark patterns have become a focal point of digital commerce regulation. Under Indiaโs 2023 Guidelines for Prevention and Regulation of Dark Patterns (GPRDP), these tactics are defined as user interface designs that impair consumer autonomy. Much of the scrutiny has fallen on e-commerce platforms, where practices such as drip pricing, false urgency, or subscription traps are seen as threats to fair choice.
Yet the survey based on responses from over 1,000 consumers across online and offline retail formats, suggests a more layered reality. These patterns are not confined to digital commerce, nor are they uniformly viewed as deceptive. A substantial share of consumers do not report behavioural change, and some even find these nudges helpful. The challenge for policymakers then is to develop a regulatory framework that distinguishes manipulation from persuasion.
Moving from Definitions to Experience
The GPRDP guidelines identify thirteen dark patterns. These include pricing tactics such as basket sneaking and bait-and-switch, attention-grabbing cues like false urgency, and friction-inducing designs such as confirm shaming or forced action. Their unifying feature is that they are seen to interfere with decision-making by exploiting cognitive biases or creating artificial constraints.
The survey assessed nine of these patterns with both online and offline applicability. Conducted through structured questionnaires in July-August 2024, it asked consumers about their encounters with these design features in digital and physical retail settings, and their perceived impact on shopping behaviour.
Results show that dark patterns are more frequently noticed in digital environments. Close to 50 percent of respondents reported encountering them frequently while shopping online, compared to 27 percent in physical stores. Yet prevalence did not always translate into perceived harm. Many consumers, 38 percent online and 50 percent offline, said these patterns had no effect on how they shop. In fact, a notable minority even found them helpful, saying they clarified or sped up purchasing decisions.
A Closer Look at The Retail Experience
Consider this: a customer booking a hotel online sees a banner warning โOnly 2 rooms left at this price!โ followed by a convenience fee added at checkout. Are they being manipulated, or simply prompted to act on available information? Now imagine the same tactic used in a physical store: โlimited stockโ signage on a rack, followed by add-on charges for delivery or assembly at the billing counter. The mechanics are similar, yet the former often attracts regulatory attention while the latter does not.
The survey data underscores this asymmetry. Several patterns identified in digital regulation, such as urgency cues or last-minute charges, are rooted in longstanding offline practices. Product placement near checkout counters, premium shelving arrangements, and mandatory form-filling at billing desks are physical analogues of interface interference and forced action. Their online versions are more visible and easier to track, but not inherently more harmful.
The findings also reveal that not all dark patterns are viewed equally by the customers. Pricing-related practices, such as drip pricing and bait-and-switch, tend to provoke greater annoyance, particularly when they are perceived to create financial opacity. These are candidates for closer scrutiny. On the other hand, urgency messages, repeat prompts, and certain interface designs received more neutral or even positive responses.
What matters most is not the tactic itself, but the context in which it is deployed: whether the consumer feels misled, or merely nudged. This points to a larger gap in current regulatory thinking.
Calibrating Regulation to Context
Indiaโs current approach focuses heavily on e-commerce platforms, many of which have been asked to self-audit for dark patterns. Yet if similar tactics are commonplace in physical retail, drawing a sharp regulatory line between formats risks looking arbitrary. Moreover, not all online practices are equally damaging. Blanket prohibitions or rigid design norms may suppress innovations in user experience, AI-based recommendations, or personalised commerce.
What is needed instead is a shift toward an ex-post, principles-based approach. Rather than proscribing certain interface elements in advance, regulators should evaluate practices based on actual consumer harm. This would mean prioritising three factors: transparency (was information clear?), consent (did the consumer willingly proceed?), and proportionality (was the influence excessive relative to the transaction?).
This could be operationalised through disclosure standards or design-rating indices, similar in spirit to nutritional labelling. Platforms might be required to flag certain nudges as behavioural cues, allowing consumers to make more deliberate choices. A graded harm index could also help distinguish between minor irritants and manipulative patterns with demonstrable financial impact.
Aligning with International Frameworks
Globally, regulation of digital design is moving toward outcomes-based frameworks. The European Unionโs Digital Services Act, for example, focuses on platform accountability and systemic risk, rather than individual interface choices. Similarly, US regulators are targeting deceptive practices that lead to measurable harm, such as financial loss or data misuse.
Indiaโs current guidelines are broader in scope but less differentiated in enforcement. Aligning with international best practices does not require dilution, it requires specificity. This could include sectoral targeting (travel and hospitality, where urgency-based decisions are more coercive), tiered obligations (larger platforms face stricter transparency norms), and coordination between sectoral regulators.
It may also require revisiting how online and offline retail are regulated. If the aim is to protect consumer autonomy, the principles must apply equally across formats. The design of a website and the layout of a store may look different, but both shape behaviour. A consistent standard, centred on informed decision-making, can create a level playing field while enhancing consumer trust.
The Path Ahead: Precision Over Generalisation
The survey findings do not suggest that dark patterns should be ignored. Some clearly frustrate or disadvantage consumers, especially where financial transparency is compromised. Others, however, resemble ordinary marketing; shaping choices without undermining autonomy.
Treating all influence as manipulation risks eroding the legitimacy of consumer protection frameworks. It may also restrict the use of legitimate personalisation tools that benefit users. Whatโs required is calibrated regulation: grounded in evidence, responsive to context, and focused on consumer outcomes.
As Indiaโs digital economy matures and retail channels converge, the need for regulatory clarity becomes more urgent. Dark patterns are a real concern, but not all nudges are dark. The key is to identify which ones matter, why they do, and how best to respond.
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Author:
The discussion in this article is based on authorโs research published at Esya Centre (Issue 51). Views are personal.