Dark Patterns Under Sebi Scanner? Study Says 95% of Listed Firms Use Manipulative Online Tricks

Whether you're booking flight tickets, ordering food, shopping online or subscribing to a streaming service, chances are you've encountered digital tricks designed to influence your decisions.

These tactics—known as dark patterns—are increasingly drawing regulatory attention in India after a new study claimed that 95% of publicly listed companies with consumer-facing online platforms use at least one manipulative design practice.

The findings have prompted fresh calls for the Securities and Exchange Board of India (Sebi) to require listed companies to declare themselves "dark pattern free", making digital ethics a new corporate governance priority alongside environmental, social and governance (ESG) standards.

What are dark patterns?

Dark patterns are user interface or website design techniques intentionally created to influence consumers into making decisions that primarily benefit businesses rather than users.

While many appear harmless at first glance, they often manipulate consumer behaviour by making certain actions easier while discouraging others.

Common examples include:

• Countdown timers creating false urgency.
• Hidden charges appearing only during checkout.
• Automatically adding products or services to shopping carts.
• Subscription cancellation processes that are intentionally complicated.
• Repeated pop-ups pressuring users into accepting offers.
• Misleading discounts or promotional messages.

Such practices can result in consumers spending more money, sharing unnecessary personal information or remaining subscribed to services they no longer want.

Study claims dark patterns are widespread

According to the latest LocalCircles study, manipulative digital practices have become widespread across India's online economy.

The survey analysed more than 310 consumer-facing digital platforms using public feedback, consumer complaints and AI-based detection tools.

Its findings suggest:

• 95% of listed companies operating consumer transaction platforms used one or more dark patterns.
• Only five listed companies were identified as free from manipulative design practices.

The companies identified in the report include:

• Meesho
• Page Industries (Jockey)
• Hamleys (Reliance Retail)
• ECOS Mobility & Hospitality
• Easy Trip Planners

The study also reviewed companies that had voluntarily submitted declarations claiming they were free from dark patterns.

According to the analysis, only a small number of those declarations matched the actual consumer experience on their digital platforms.

The most common dark patterns

The report found several recurring tactics across digital businesses.

Forced Action

The most frequently detected practice requires users to complete unnecessary actions—such as creating an account or sharing personal information—before accessing services.

Drip Pricing

Additional charges only become visible at the final payment stage, making products appear cheaper than they actually are.

Interface Interference

Important choices are deliberately made difficult by manipulating colours, button sizes or menu placement.

Subscription Traps

Consumers can subscribe with one click but face multiple complicated steps when trying to cancel.

Other commonly reported practices

The report also identified:

• Bait and Switch
• Nagging through repeated prompts
• Privacy Zuckering
• Confirm Shaming
• Basket Sneaking
• False Urgency

Together, these practices can significantly influence purchasing decisions without consumers fully realising it.

Which industries are affected?

According to the study, dark patterns are no longer limited to e-commerce websites.

They were reportedly found across numerous sectors, including:

• Online shopping
• Digital lending
• Banking
• Insurance
• Food delivery
• Travel booking
• OTT streaming
• Ride-hailing platforms
• EdTech
• Quick commerce
• Online grocery
• Real estate
• Gaming
• Digital payments
• Cryptocurrency platforms
• Telecom services

The findings suggest that manipulative interface design has become a broader digital economy issue rather than an industry-specific problem.

Why Sebi is being drawn into the debate

Although consumer protection regulators have already introduced guidelines addressing deceptive online practices, attention is now shifting toward listed companies and investor protection.

The report argues that dark patterns should be viewed not only as consumer rights violations but also as corporate governance risks.

Manipulative digital practices can expose companies to:

• Regulatory action
• Consumer litigation
• Financial penalties
• Reputational damage
• Loss of investor confidence

Because of these risks, LocalCircles has urged Sebi to require every listed company—and companies planning to launch public issues—to submit regular self-declarations confirming that their digital platforms are free from dark patterns.

Digital ethics may become the next ESG

Over the past decade, investors have increasingly evaluated companies using Environmental, Social and Governance (ESG) standards.

Many governance experts now believe digital ethics could emerge as another important indicator of responsible corporate behaviour.

How companies design websites, mobile applications and online purchasing journeys may soon become as important as how they manage environmental sustainability or board governance.

If disclosure norms become mandatory, businesses may have to review not only their advertising practices but also the user experience across their digital platforms.

What this means for consumers

For everyday users, recognising dark patterns can help avoid unnecessary spending.

Consumers should remain alert for:

• Prices that suddenly increase during checkout.
• Pre-selected add-ons.
• Difficult cancellation processes.
• Limited-time offers designed to create artificial urgency.
• Requests for unnecessary personal information.

Being aware of these tactics can help users make more informed decisions while shopping online.

Business Impact

Impact on Companies

• Increased regulatory scrutiny over website and app design.
• Greater compliance requirements for listed firms.
• Potential reputational risks if manipulative practices continue.

Impact on Investors

• Digital ethics could become an emerging governance metric.
• Companies with transparent customer practices may attract stronger investor confidence.
• Compliance risks could influence long-term valuations.

Future Outlook

If Sebi expands oversight beyond advertisements to customer interfaces, listed companies may need to redesign websites and mobile applications to eliminate manipulative practices. This could establish new standards for digital transparency across India's online economy.

Featured Snippet

A new study claims that 95% of listed consumer-facing companies use "dark patterns"—digital design techniques that influence consumer decisions. The findings have prompted calls for Sebi to require companies to disclose whether their online platforms are free from manipulative practices.

Key Highlights

• Study claims 95% of listed consumer platforms use dark patterns.
• Dark patterns influence purchasing decisions through manipulative design.
• Common tactics include drip pricing, forced action and subscription traps.
• Calls are growing for Sebi to require "dark pattern free" disclosures.
• Consumer regulators have already issued guidelines against deceptive interfaces.
• Digital ethics is increasingly being viewed as a corporate governance issue.
• Investors may soon evaluate companies based on digital transparency.
• Businesses could face stricter compliance requirements in the future.

Conclusion

As India's digital economy continues to expand, attention is shifting from what companies sell to how they sell it. The debate over dark patterns reflects growing concern that online design choices can influence consumer behaviour in ways that are neither transparent nor fair. If Sebi decides to introduce disclosure requirements, digital ethics could become a defining element of corporate governance, encouraging companies to prioritise trust, transparency and responsible design alongside financial performance.

FAQs

1. What are dark patterns?

Dark patterns are website or app design techniques that manipulate users into making choices benefiting businesses rather than consumers.

2. Why is Sebi being asked to act?

A study recommends Sebi require listed companies to declare themselves free from manipulative digital practices as part of good corporate governance.

3. What is drip pricing?

Drip pricing occurs when extra charges are revealed only at the final stage of payment.

4. What is a subscription trap?

It refers to making subscriptions easy to start but intentionally difficult to cancel.

5. Which sectors commonly use dark patterns?

The study identified practices across e-commerce, banking, travel, food delivery, OTT platforms, insurance, gaming and several other digital services.

6. Has India banned dark patterns?

The Central Consumer Protection Authority (CCPA) has issued guidelines prohibiting deceptive online design practices, while Sebi is examining related issues in regulated entities.

7. Why do dark patterns matter to investors?

Manipulative practices may create legal, regulatory and reputational risks that could affect a company's long-term financial performance.

8. How can consumers protect themselves?

Carefully review checkout pages, compare final prices, avoid rushed purchases and read subscription terms before making payments.