Why ecommerce platforms like Amazon and Flipkart are under govt probe
Pralhad Joshi warns of strict action against e-commerce platforms for misleading customers with charges like ‘offer handling fee’ and other ‘dark patterns’
The central government has launched a probe into some e-commerce platforms for charging customers extra for cash-on-delivery (COD) orders after increasing complaints from consumers.
Hundreds of customers have lodged complaints on social media against e-commerce platforms like Amazon and Flipkart for adding what they called “baseless fees” when they ordered something online. Many of them alleged that these companies are charging extra for cash-on-delivery (COD) orders, and are imposing high platform fees, especially during the festive sale.
Pralhad Joshi, Union Minister for Consumer Affairs, announced on Friday (October 3) that action would be taken against e-commerce platforms that charge extra fees for COD by misleading customers.
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The controversy
A post on social media platform X went viral earlier this week citing a user’s concern about an extra Rs 226 COD charge on an e-commerce order from Flipkart.
The extra charge reportedly was broken down under various fees – “offer handling fee”, “protect promise fee”, and “payment handling fee”.
The irate customer wrote sarcastically, “Forget Rain Fee by Zomato / Swiggy / Zepto. See the masterstroke by Flipkart: Offer Handling Fee (for giving me the discount you advertised??), Payment Handling Fee (for letting me pay you??), and Protect Promise Fee (protecting me from what satisfaction??).
“Next up: Scrolling App Fee,” he joked.
“This isn’t just about Flipkart. Many platforms are normalising extra fees. Amazon with similar charges, Zomato adding a ‘festival fee’, Lenskart with a ‘fitting fee’…and the list goes on,” wrote the user.
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Minister’s response on X
Joshi replied directly to the post, “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.”
“A detailed investigation has been initiated and steps are being taken to scrutinise 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,” continued the minister in his post.
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‘Dark patterns’
Dark patterns are deceptive tactics used by companies to manipulate customers into paying extra without them realising it.
These tactics include platforms trying to speed up customers’ purchase decisions by informing them that there are only one or two pieces of a particular item available when there are actually many more in stock, or setting a fake time limit lime “offer expires in 15 minutes”.
Using confusing language for fees or making it more difficult for consumers to identify them by putting them at the end of a long list is also a dark-pattern tactic.
The government has reportedly strengthened rules against unfair digital practices, expanded the ban on dark patterns to include tactics such as false urgency, subscription traps, disguised ads, and “drip pricing”.
The Central Consumer Protection Authority in June reportedly directed e-commerce platforms to self-audit and remove such practices.