Tracing Dark Patterns Through the Lens of IP & Competition
By Nidhi Doshi and Soumya Singh
Cancelling an online magazine subscription, which you don’t even remember subscribing to, seems equally impossible as canceling your gym membership? Felt on the top of the world when your social media post crosses deep into three-digit number of Likes? What if you realized that you never intended to subscribe to the magazine or that the aim of the social media platform, its algorithm, is not to make you happy but to manipulate your actions? The dopamine hit that users feel when they think they have achieved something on social media platforms is encouraged by an attention-seeking mechanism. Welcome to the world of dark patterns and the complex web of varying aspects spun in this field.
What are dark patterns?
Harry Brignull, in 2010, coined the term “dark patterns”, and it has been an ongoing journey in deciphering the concept, the role, and the implications of the same in a rapidly evolving technological and digital world. When you serve a variety of options for the global consumer base, ideally, they are free to make their own choices and choose from this array of presentations.
However certain choices that you think you make and are actively involved with on the web, “trick” and “manipulate” users to make particular choices, knowingly or even unknowingly, that hinders their free will and ability to exercise choice in the consumption of goods or services. Furthermore, there are various recognized methods of dark patterns that we experience unconsciously, almost daily, like the Roach motel. It is a situation wherein the users find it difficult to escape where they have been entrapped in. For example, various OTT platforms have encouraged users to try their free subscription for a limited period which is accessible with just one click.
However, it makes it complicated for the users to cancel their free subscription before the trial ends. There are times where the users forget to cancel their subscription and end up getting billed arbitrarily. The expansive coverage of the internet, network and connectivity has catapulted this practice beyond measurable range.
The Foundational Role of Intellectual Property
The immensely competitive world, especially in the e-commerce sector, now more so than ever, has further propelled the culture of “understanding” consumer behaviour by any means including, and not limited to tracking, tracing, monitoring, and analyzing, among others — dispelling any ounce of doubt that more often than not, ethics and such restrictions are not in consideration.
This has become both possible and attainable through the application of intellect resulting in desirable innovations for these entities — especially visible and experienced through their websites’ designs and the approach towards consumers. Powerful techniques like “web scraping” are resorted to, which are known for their extraction and analysis of large data sets while raising serious ethical concerns. Intellectual Property (“IP”) incentivized through Intellectual Property Rights enable a productive sphere with innovations, creativity, accessibility, and promoting healthy competition leading towards consumer welfare.
However, consumer welfare is the constituent of the equation that is facing the brunt with the advent of dark patterns. IP in the form of computer and web designs and algorithms have fuelled the competitors to keep innovating and finding ways to circumvent various ambiguous boundaries between law and ethics and the result is found in the form of near-to-impossible cancellation of click-bait magazines, shopping carts ending up with “extra” items, and social media behavioral-manipulation. “Design”, and thus IP, is at the base of the arising concerns which primarily take the shape of competition or antitrust concerns and data-privacy concerns.
Competition and related data-privacy concerns
Since the beginning, the antitrust frameworks have failed to adequately and uniformly address issues concerning the ubiquitous digital markets which have been present for decades. This can be mainly attributed to the fact that the digital economy mainly comes under the aegis of zero-price markets. Antitrust concerns have always mainly related to prices that impact consumer welfare. With the advent of zero-price markets, where the price component seems to be missing largely, it becomes difficult to consider the anti-competitive practices incorporated by such companies. Adapting the antitrust framework with the digital market has become the number one goal for global antitrust regulators. This goal is much appreciated, as it directly links to addressing and resolving the issue of the resultant dark patterns.
Consumer manipulation plays a driving role in the intersection of all these concerns. It is extremely important to be decoded as what the users fail to understand, is the economic value of their attention. Attention is considered the chief commodity for platforms to increase user interactions since it is directly linked to the profitability of such companies. The pervasive approach enables the companies to expand their market position and thus, become better than their competitors, or even the best, globally. The more data and control over it a company has, the more powerful it gets. This further creates entry barriers for the newcomers since the big-tech has dominated the market. Hence, dark patterns dampen the competition in the market. Also, with data and attention, platforms can manipulate the users’ choices under the guise of free will. This further affects the users’ privacy, more specifically “decisional privacy”. It is to be noted that no antitrust tribunal has formally litigated the issues surrounding decisional privacy.
To tackle these concerns, various legal regimes are taking on the mammoth responsibility to attempt to regulate this dynamic sphere in the most appropriate way. Already, big-data exploitation and tampering with consumer choice and welfare has attracted huge penalties from the tech giants. This sets up a good precedent for the issue of dark patterns.
Legislators across the European Union and the US have attempted to address the issues arising out of dark patterns by devising appropriate solutions. The US regulatory body, Federal Trade Commission has taken cognizance of the incorporation of dark patterns in companies’ practices. Only recently, California has passed a new set of regulations under the California Consumer Privacy Act, which bans the use of dark patterns to protect consumer privacy. EU’s General Data Protection Regulations has not taken an explicit note of dark patterns, however, it has attempted to integrate Consent Management Platforms to ensure informed consent and adoption of technical and organizational measures guaranteeing privacy by design. Furthermore, the Data Protection Authority of France had released a report in 2019 which has recognized the need to develop a framework for the regulation of dark patterns.
The Competition Commission of India (“CCI”) has been trying to speed up the adaptation process with the proliferation of technological advancements. It has been conducting market studies around sectors that involve the major use of data. In its market study on the e-commerce sector in India, the CCI has realised the relevance of data used by e-commerce platforms that enables them to manipulate their consumers. The CCI has, however, realised in their market study on the telecom sector, that “privacy can take form of the non-price competition”. They have highlighted the importance of privacy to be a factor of antitrust law, since both these aspects aim to protect consumer welfare.
Are dark patterns inescapable?
Currently, dark patterns are deeply rooted in our digital environment. A constantly evolving concept like dark patterns and their adverse implications cannot be undone overnight. Systemic developments can be made to the current legal systems, globally, that can enable an initiation point for their effective management and control. Understanding the involvement of the two major players of the domain, IP and competition, specific suggestions have been formulated to make an attempt for the concept and its regulation to gain momentum in our legal systems.
The Indian antitrust regime, still being at its nascent stage, has yet to come at par with the global level. Hence, the CCI may lack certain authority to condemn the digital monopolies that may or may not have a tangible presence in the country. Adoption of a separate and comprehensive legal mechanism to regulate the activities of the digital economy seems like the most feasible remedy. The aim of developing such a framework would be to foster economic goals through promoting innovation and ensure consumer welfare by encouraging consensual use of consumer data. The framework must lay down the specific anti-competitive practices that are unique to the digital economy since it is important to adopt a more inclusive approach.
Distinguishing persuasive practices (pro-competitive) with coercive practices (anti-competitive) of the companies should be the central idea of the framework. Explicit condemnation of digital coercion is necessitated, since it directly links with the companies’ use of dark patterns and digital manipulation. Antitrust mechanism would be the most accurate remedy to regulate digital manipulation. Further, condemning non-price factors (such as privacy) i.e. recognising such factors for determining anti-competitive practices could enable the preservation of free will of the consumers. Lastly, a distinct merger control regulation involving the big-tech could further be formulated to preserve competition in the digital market. Acquisitions by such companies have been trending since the last decade for two reasons- first, eliminating competition in the digital market and second, expansion of data collection sources to enhance their existing market position.
Concepts like “privacy by design” rooted in data-privacy resolution, which is both proactive and preventative in nature, can be used as a solution. Privacy by design can be utilized to use the best of the involved domains and solving the issue at hand. Information technology systems, technology base, and the web-designs themselves can be made to adhere to this model through the IP laws and the data privacy angle is inherently covered, which prevents exploitation of such data and covers the unfair competition angle too.
Author Nir Eyal has worked on a method, a “manipulation matrix”, where he has discussed the persuasive design along with the moral-ethics code of designers, and how it can help in creating ethically stronger platforms.
An in-depth understanding of the issues, their implications and application of solution-based ideas help correct the systems and maintain fairness without restricting or imposing upon any particular party’s rights. Rights of innovators, market players, as well as consumers are intended to be balanced. The aim is to protect and promote the domain of IP laws, competition laws, as well as consumer laws in their intended manner.
[This article by Nidhi Doshi and Soumya Singh, law students at SVKM’s NMIMS, Mumbai, was the third prize winning entry at the JDCIL-Esya Centre Article Writing Competition held in 2021]