Commerce and Industry Minister Piyush Goyal stated on Tuesday that the government is concerned about unfair practices like predatory pricing and other dishonest methods used by e-retailers, rather than flash sales on online platforms. He expressed disapproval of e-retailers directing consumers participating in flash sales to specific entities, which goes against foreign direct investment rules and is considered cheating.
Goyal clarified that the government supports discounts that benefit consumers but is opposed to two issues – predatory pricing, which involves dumping goods at very low prices for an extended period, harming domestic manufacturing, and methods that limit consumer choices.
“We are only trying to stop that cheating through the e-commerce policy that we are coming out with,” Goyal emphasized. He highlighted the importance of considering the long-term well-being of Indian consumers, expressing concern about predatory pricing or methods that cheat the public of choices.
Drawing attention to foreign e-commerce players with deep pockets, Goyal emphasized their willingness to invest billions in India, even at the cost of significant losses, to gain more customers. He stressed the need for e-commerce players to adhere to the country’s FDI laws and operate as marketplaces rather than engaging in unfair practices.
Goyal also pointed out that in developed economies, local stores are closing due to the dominance of e-commerce giants. He assured support for small retailers, emphasizing the government’s commitment to protecting them and ensuring a bright future.
“I would urge everybody, whether Indian or foreign, to support this effort to protect our small retailers,” concluded the minister.
Some real-life examples of dark patterns used by e-commerce platforms:
1. Hidden costs: Amazon is notorious for adding hidden costs to purchases at checkout. For example, they may charge shipping fees even for items that are eligible for free shipping if you order them individually. They may also add handling fees or taxes that are not disclosed upfront.
2. Urgency tactics: Many e-commerce platforms use countdown timers or limited-time offers to create a sense of urgency and pressure users into making quick decisions. For example, a website might display a message saying “This offer expires in 10 minutes!” This can lead to impulse purchases that users may later regret.
3. Social proof: Websites often display fake or misleading customer reviews or testimonials to influence users’ perceptions of a product or service. For example, a website might display a five-star rating for a product even if the majority of real reviews are negative.
4. Auto-enrollment: Many e-commerce platforms automatically enroll users in optional services or subscriptions without their explicit consent. For example, a website might automatically add a subscription to a service like Norton Antivirus to your order without asking you first.
5. Confusing navigation: Some websites make it difficult for users to find the information they need or navigate through the checkout process. This can lead to frustration and abandonment. For example, a website might make it difficult to find the contact information or return policy.
6. Pre-checked boxes: Many websites pre-select optional add-ons or services without clear disclosure. This can lead to users inadvertently agreeing to charges they didn’t intend to incur. For example, a website might pre-check a box for a gift wrapping service without making it clear that this is an additional charge.
7. Limited options: Some websites provide users with a limited set of choices, often favoring more expensive or less favorable options. This can restrict users’ decision-making process and lead to suboptimal choices. For example, a website might only offer two shipping options: one that is very expensive and one that takes a very long time.
8. Bait-and-switch: Some websites advertise products or services at enticing prices and then switch users to more expensive alternatives during the checkout process. This is a deceptive and unfair practice. For example, a website might advertise a product for $99, but then during checkout, they add a $50 shipping fee.
9. Fear of missing out (FOMO): Many e-commerce platforms create a sense of FOMO by emphasizing limited availability or exclusive offers. This can pressure users into making quick decisions without fully considering the product or service. For example, a website might display a message saying “Only 10 left in stock!”
10. Complex pricing: Some websites use complex pricing structures with hidden fees or price differences based on factors like location or purchase history. This can make it difficult for users to compare prices accurately. For example, a website might charge a different price for a product depending on the user’s location.
