Extra fees for cash-on-delivery? Govt launches probe into e-commerce platforms

The government has initiated an investigation into complaints against e-commerce platforms allegedly charging additional fees for cash-on-delivery (CoD), a practice classified as a “dark pattern” that misleads consumers, Union Consumer Affairs Minister Pralhad Joshi said on Friday.

“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,” Joshi said in a post on X.

“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.

Joshi was responding to a user’s post on X, which shared a screenshot of the price details of an item purportedly listed on Flipkart.

"Forget Rain Fee by Zomato/Swiggy/Zepto. See the masterstroke by Flipkart," the user wrote.

The charges included ‘Offer Handling Fee,’ ‘Payment Handling Fee’ and ‘Protect Promise Fee.’

The development comes weeks after Walmart-owned Flipkart Group announced that it had completed a self-audit across its platforms to identify and remove so-called dark patterns. The company had also submitted a compliance declaration to the Ministry of Consumer Affairs in line with guidelines issued by the Central Consumer Protection Authority (CCPA).

“We are deeply committed to ensuring every consumer interaction is built on transparency and trust,” said Rajneesh Kumar, Chief Corporate Affairs Officer, Flipkart. “Our recent self-audit … is a proactive step that reinforces our role as a responsible digital marketplace.”

In June, the CCPA had directed online platforms to conduct audits within three months to weed out manipulative design practices such as hidden fees and forced subscriptions.

India’s fast-growing e-commerce sector, dominated by Amazon and Flipkart, has come under mounting regulatory scrutiny as authorities attempt to curb practices deemed harmful to consumers and ensure a level playing field for smaller retailers.

In August, quick-commerce startup Zepto modified parts of its app flagged as dark patterns, including its free-delivery feature and checkout flow, after consumer complaints.

The government in 2023 formally defined 13 categories of dark patterns, including “basket sneaking,” “drip pricing” and “subscription traps,” to crack down on deceptive digital practices.