Govt launches probe into e-commerce platforms charging extra for COD orders

Govt launches probe into e-commerce platforms charging extra for COD orders

The government has launched a formal investigation into e-commerce platforms charging extra for Cash-on-Delivery (COD) orders, calling the practice a “dark pattern” that misleads and exploits consumers.

“The Department of Consumer Affairs has received complaints against e-commerce platforms charging extra for Cash-on-Delivery, a practice classified as a dark pattern that misleads and exploits consumers,” Consumer Affairs Minister Pralhad Joshi said in a post on X on October 3.

“A detailed investigation has been initiated and steps are being taken to scrutinize these platforms closely. Strict action will be taken against those violating consumer rights to ensure transparency and uphold fair practices in India’s growing e-commerce sector,” he added.

The ministry’s move comes amid growing scrutiny of deceptive digital practices, particularly in online commerce, where seemingly small charges or tweaks in checkout flows can have widespread impact.

Why has the government launched this probe?

The investigation follows consumer complaints received earlier this year, after some platforms started levying ‘cash handling fees’ on COD orders. One such instance gained attention in July, when Zepto users flagged the practice on social media and accused the platform of adding non-transparent charges at checkout.

Such fees may qualify as drip pricing, one of the 13 dark patterns recognised under Indian law, and hence warrant closer scrutiny.

What exactly are dark patterns?

Dark patterns are deceptive design elements built into digital interfaces to influence user behaviour in ways that benefit companies at the expense of transparency. These could be visual tricks, confusing language, or hidden settings that nudge users toward outcomes they might not have consciously chosen.

Such tactics can push users to spend more money, share personal data, or accept terms they don’t fully understand. For example, hiding delivery fees until the last step, pre-selecting consent boxes, or using fake urgency messages like “only 1 item left” are all considered dark patterns.

In November 2023, the Consumer Affairs Department officially classified 13 such tactics — including drip pricing, false urgency, bait and switch, confirm shaming, subscription traps, trick questions, disguised ads and forced action — as “unfair trade practices” under India’s Consumer Protection Act.

How widespread is the problem in India?

A 2024 report by the Advertising Standards Council of India (ASCI) found that 52 of the 53 most-downloaded apps in India use at least one form of deceptive design. These ranged from hidden charges and nagging prompts to misleading consent boxes and interface interference.

The ASCI noted that these were not isolated or accidental features but systematic design strategies embedded into the user journeys of many apps, particularly in sectors like e-commerce, fintech, and online gaming.

Consumer groups have repeatedly flagged that because these practices are subtle, users often don’t realise they’ve been nudged or misled until after they complete a transaction.

What is the government doing to tackle this?

The investigation into COD charges is part of a broader crackdown on manipulative digital practices. On May 28, the Ministry of Consumer Affairs held a high-level meeting with senior representatives of major e-commerce companies.

At that meeting, the government directed companies to conduct internal audits of their user interfaces and dark pattern practices, make the results public, and ensure compliance with the guidelines issued in 2023. It also proposed the formation of a joint working group comprising industry and government representatives to address evolving challenges.

Officials said that the COD fee probe will involve reviewing platform practices, collecting evidence from consumers, and examining whether these charges were disclosed clearly and at what stage in the purchase process.

What happens next?

Platforms found to be in violation of the dark pattern guidelines could face regulatory action under the Consumer Protection Act. This could include penalties, mandatory changes to interface design, or stricter disclosure norms.

The outcome of the investigation will likely set an important precedent, as COD remains one of India’s most widely used payment modes, especially outside major metros. The ministry’s action signals that fee structures and interface designs will increasingly come under the same level of regulatory scrutiny as pricing and advertising claims.