Welcome to The Esya Dispatch, a weekly snapshot of the policy debates shaping India’s digital economy. Each edition brings together key developments in technology policy, from platform governance and AI regulation to data protection and competition — along with the Esya Centre’s perspective on what they mean for innovation, businesses, and users.
Here’s a quick recap of two key tech policy developments from the past week:
1. GOVT AMENDS CONSUMER PROTECTION (E-COMMERCE) RULES, 2020
The Department of Consumer Affairs recently issued amendments to the Consumer Protection (E-Commerce) Rules, 2020, with changes taking effect from January 1, 2027. Under the amended framework, marketplace e-commerce platforms are prohibited from manipulating search results in ways that mislead users, must clearly label sponsored listings, and must show the ‘prior price’ alongside any discount. They must also comply with the Guidelines for Prevention and Regulation of Dark Patterns, 2023 and conduct a yearly self-audit regarding their compliance. Further, they must seek express users’ consent before using their information for specified purposes, disclose the country of origin of imported goods and join the National Consumer Helpline’s convergence programme.
Esya’s take: Many of the proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020 are overbroad and impose undue burdens on marketplace e-commerce entities. For instance, under the amended framework, such entities must explain the parameters that are the most significant in determining how goods and sellers are ranked on their services, using simple and accessible language. This raises intellectual property concerns, because ranking parameters may be considered a trade secret of the platform concerned. This requirement may also benefit larger sellers at the expense of their smaller counterparts, who lack the resources to interpret and respond to various ranking parameters.
Additionally, the proposed amendments mandate marketplace e-commerce entities to comply with the Guidelines on the Prevention and Regulation of Dark Patterns, 2023. However, many practices identified under these Guidelines are not necessarily harmful or manipulative and have a neutral to positive effect on consumer behavior. For example, our study analyzing dark patterns in e-retail found that 42.7 percent of consumers believe that practices like creating urgency (e.g. informing them that an item is in low stock) encourages them to shop more and positively affects retail experience, while 38.8 percent said that it does not affect their shopping habits. Similarly, 39.8 percent of consumers stated that nudges (e.g. repeated queries asking them to download an app) have a positive impact, while 39.3 percent reported no change in their shopping behavior. Thus, the proposed amendments are overbroad and risk prohibiting practices that many consumers do not perceive as harmful.
Further, the proposed amendments prohibit marketplace e-commerce entities from using user data to sell goods by any seller under the same brand or name or promote any associated seller without obtaining user consent. Our study assessing similar cross-use data restrictions under the Draft Digital Competition Bill, 2024 found that 61 percent of Indian MSMEs believed such measures would reduce the effectiveness of targeted ads and negatively affect their business. These requirements may therefore harm smaller sellers that rely on targeted advertising to compete with larger firms and reach consumers
2. APPLE SOFTENS TRACKING PROMPTS AFTER AGREEMENTS WITH EU COMPETITION AUTHORITIES
Apple is introducing changes to its App Tracking Transparency (“ATT”) framework, following agreements with different EU competition regulators. First, under the revised ATT framework, the word “track” will be dropped from the language of the prompt and developers will be allowed to insert a clickable link that explains why they wish to link user or device data from their app with that collected from third-party apps and websites. Developers will also be allowed to re-prompt users to accept or reject tracking every year. For now, these changes will be rolled out in Germany, France, Italy, Poland and Romania.
Esya’s take: These changes follow concerns that Apple’s ATT feature has adversely affected businesses relying on targeted advertising. Many scholars have found that the ATT feature, which required users to provide express consent for tracking when using apps across their iPhone, disrupted revenues and stock market value for a range of companies that relied on targeted advertisements to reach end-users. Most notably, the French Competition Authority had held that Apple’s implementation of the ATT framework was abusive under competition law, because it was especially detrimental to players relying on online advertising for revenue.
This agreement also demonstrates the doctrinal incoherence underpinning the EU’s digital competition framework. On the one hand, Article 5(2) of the Digital Markets Act prohibits gatekeepers from combining users’ personal data across services without obtaining their consent. This restriction aims to weaken data feedback loops that are said to entrench gatekeepers’ market power and create greater opportunities for rivals to compete and innovate. On the other hand, however, EU competition authorities appear to believe that Apple’s ATT framework, which imposes similar restrictions on cross-use of data, may itself restrict competition by making it more difficult for app developers to obtain users’ consent. Thus, the EU is limiting the cross-use of data under the DMA while simultaneously seeking to facilitate such data use through enforcement actions. This raises concerns about whether the EU’s digital competition framework is based on a coherent and consistent theory of harm.