Unfair trade practices are one of the biggest challenges in India’s contemporary economy. This challenge has intensified with the rapid digitisation of day-to-day transactions, growing dependence on online platforms and the increasing use of digital advertising, algorithmic targeting and data-driven consumer profiling. Markets today no longer operate only through price and product competition, but they increasingly function by way of behavioural influence and interface design. In such an environment, unfair trade practices do not merely distort individual transactions, but they also weaken the conditions necessary for informed and voluntary consumer choice.
Indian law has combatted unfair trade practices through a gradual process of legal measures. Initially, under the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, unfair trade practices were primarily treated as distortions arising from monopoly power, with consumer harm treated as incidental to market structure .This framework proved inadequate, as many deceptive practices caused consumer harm, the consequences of which were wide-ranging without any effect on competition in a meaningful way. The Consumer Protection Act, 1986, marked a notable shift by recognizing consumers as rights-bearing actors. Unfair trade practices were brought within its ambit and with the enactment of the competition law in 2002, the MRTP Act was repealed in 2009. With the advancements in the area of consumer protection, the Consumer Protection Act, 1986 was replaced by the Act of 2019.
Section 2(47) of the Consumer Protection Act, 2019 provides a broad definition of unfair trade practices, which is rather expansive, covering misleading representations, false advertisements, deceptive pricing, non-disclosure of material information & manipulative sales tactics. The definition is not closed, which shows legislative recognition that unfairness evolves alongside business models and technology, especially so in today’s world. The 2019 Act thus shifts away from narrow technical compliance and focuses instead on the actual effect of trade practices on consumer behaviour and understanding.
Judicial interpretation has reinforced this consumer-centric approach, with the Supreme Court having repeatedly held that unfair trade practices must be assessed in light of consumer vulnerability and unequal bargaining power rather than solely contractual form .In Pioneer Urban Land and Infrastructure Ltd. v. Union of India, the Court recognised that structural inequality between service providers and consumers can render seemingly voluntary agreements substantively unfair, particularly in sectors such as real estate and held that the consumers (homebuyers) were to be treated as creditors who can hold the sellers liable. This acknowledgement is significant, as it accepts that consumer choices are often shaped by information gaps and expectations, economic pressure and a lack of meaningful alternatives.
In PepsiCo India Holdings Pvt. Ltd. v. Food Inspector, the Court further clarified that misleading representations must be judged by their probable impact on a normal and reasonable consumer & not by the intent of the seller or the technical accuracy of the claim. This principle has become very relevant in digital markets, where representations are spread across fields of images, endorsements, pop-ups, and algorithmically curated content.
Though the aforementioned cases were not directly decided under the CPA, it is important to note that they informed the application of it by defining what key topics such as adulteration were.
The Consumer Disputes Redressal Commission(CDRC) has also upheld consumer rights at its multiple levels such as the recent case of M/s Samran Media Consultants Pvt. Ltd. vs Mercedes Benz India Pvt. Ltd. & ANR in which the Delhi State Consumer Disputes Redressal Commission ordered Mercedes-Benz India and its dealer to offer a refund for a defective car. The failure to replace a clearly defective vehicle while attempting to mitigate the situation with "goodwill gestures" rather than a permanent solution constituted a violation of the standards expected under the Consumer Protection Act.
E-commerce amplifies consumer protection issues in many ways. Online platforms do not simply host transactions; they actively guide and shape user perceptions through rankings, recommendations, default settings and promotional cues. Practices such as fake or manipulated reviews, inflated “original prices” used to advertise sham discounts, and a lack of transparency around sponsored listings directly undermine consumer choice by creating misleading impressions of value, popularity, or scarcity.
A growing area of concern is the use of dark patterns - these are design strategies that subtly but deliberately push consumers into decisions they may not otherwise make. Hidden charges revealed only at the final stage of checkout, false urgency cues like countdown timers or claims of limited stock, pre-selected add-ons and complicated cancellation or refund processes are engineered to wear down consumer resistance rather than facilitate and promote informed choices. Even when no evident falsehood is involved, such practices distort consent by manipulating attention and behaviour in a malicious manner.
Regulatory measures have begun to address these challenges. The Consumer Protection Act, 2019, is supplemented by the Consumer Protection (E-Commerce) Rules, 2020, which impose disclosure obligations, prohibit unfair cancellation charges and require greater transparency in pricing, ranking, and grievance redressal mechanisms.
The establishment of the Central Consumer Protection Authority (CCPA) has further strengthened enforcement by enabling suo motu action and providing an alternate forum for consumers against systemic and widespread digital deception.
Recent cases demonstrate this shift. In Rapido v. CCPA, the platform was held liable for misleading advertisements that created unrealistic expectations regarding prices and availability of rides through their campaigns like," Auto in 5 minutes or get Rs. 50”, and “Guaranteed Autos”. In FirstCry v. CCPA, the company was penalised for drip pricing practices that concealed mandatory charges despite claims of all-inclusive pricing. Action against Naaptol Online Shopping Limited also revealed systematic misrepresentation, including but not limited to exaggerated product claims and the presentation of pre-recorded sessions as live to create artificial urgency which was extremely unethical.Through cases like this, Indian courts and the CCPA are combating deceptive marketing tactics.
Beyond this, the CCPA has also issued the Guidelines for Prevention and Regulation of Dark Patterns, 2023 in addition to existing laws to ensure that covered entities comply with what is required of them and the Advisory also highlights Rule 4(9) of the E-Commerce Rules 2020, which mandates that user consent must be obtained through clear and affirmative action. The guidelines list out forms of dark patterns such as false urgency, basket sneaking, confirm shaming, forced action, subscription trap, bait and switch and drip pricing and are bound to enhance transparency and trust, and empower consumers.
Courts have also started to value platform responsibility and have started to hold organizations accountable for the same.In Amazon Seller Services Pvt. Ltd. v. Amway India Enterprises Pvt. Ltd., the Delhi High Court acknowledged that platforms play an active role in shaping consumer perception and cannot completely distance themselves from harm caused by any unfair practices facilitated through their systems due to contributory acts or lack of due diligence.
Popular academic commentary supports this trajectory. Farheen and Shrivastava in a paper for Jus Corpus law journal observe that the Consumer Protection Act, 2019, represents a structural improvement by expressly addressing online transactions and intermediary liability, but simultaneously, scholars caution that enforcement gaps, limited digital literacy and regulatory overlap remain significant challenges. Comparative scholarship further highlights the importance of maintaining a clear distinction between unfair trade practices under consumer law and competition law violations.
In today’s Indian market, unfair trade practices operate at the intersection of vulnerability of consumers, technological innovation and platform power. Although the existing legal framework provides a strong foundation, its efficiency depends on vigilant enforcement, informed consumers and adaptive interpretation on the part of courts and statutory bodies. As digital markets continue to evolve, consumer protection must focus not only on what businesses disclose but also on how these trade practices actually shape consumer choices and experiences.
Consumer issues in India can be reported by calling the National Consumer Helpline number 1915 and through the e-Jagriti app for quick and remote consumer redressal. Dark patterns of e-commerce sites can also be reported through the same mechanisms. If you need more specific information to address a consumer grievance, please check out this resource.
---
Add new comment