CCPA fines Zepto for hidden fees and tricky online checkout designs

The Central Consumer Protection Authority (CCPA) said Zepto's practices violated multiple provisions of the Consumer Protection Act, 2019. Mint has reviewed a copy of the final order.

Drip pricing is a deceptive practice in which the platform initially advertises a low price for a product, but inflates the final cost by charging additional fees. Basket sneaking refers to a service being added to a consumer's basket without their knowledge or consent.

CCPA's order follows the consumer affairs department’s notice issued in May, which asked all e-commerce and online platforms to follow government guidelines on dark patterns, failing which they would face action. The notices were sent to 11 companies, including Zepto, Rapido, Uber and Ola.

The CCPA order stated that Zepto displayed a lower price upfront, but increased it at checkout through undisclosed mandatory charges such as handling fees and add-ons, leading to consumers paying more than what was initially shown.

This is the second company, after Rapido, to be penalised following notices issued to the 11 firms. The action assumes significance, as India’s online retail market is expected to grow from $75 billion in 2024 to $260 billion by 2030, increasing its share of total retail from 7% to 14%, according to a Deloitte–FICCI report released in August. The report also noted that quick commerce, which already operates in more than 80 cities, is growing at 70–80% annually—one of the fastest growth rates globally.

Queries sent to Zepto’s co-founder and chief executive officer Aadit Palicha as well as its spokesperson and the ministry of consumer affairs remained unanswered till press time.

Since Zepto has not responded, it is unclear whether the e-commerce company will comply and pay the penalty, or challenge the order before the National Consumer Disputes Redressal Commission (NCDRC) or in a higher court.

Confirming the CCPA order, a government official, speaking on condition of anonymity, said that the system is transparent and provides equal opportunity to the other party, in this case, Zepto. Since the e-commerce platform violated several rules, the fine has been imposed as per the provisions of the Consumer Protection Act, which has the mandate to protect the interests of consumers.

“Dark patterns are a very serious issue, and all online and e-commerce platforms have been time and again asked to do away with these practices and adopt fair-trade practices," this official said.

Dark patterns are deceptive online designs that trick users into unwanted actions for profit.

Legal experts say the CCPA order strengthens the regulatory position that digital design cannot be used to sidestep consumer rights. “From a legal standpoint, the CCPA’s action reinforces that dark patterns are not just unethical design choices but violations of statutory obligations under the Consumer Protection Act. Platforms must understand that price disclosures, consent, and transparency are legal requirements and not optional features," said Manish K Shubhay, partner at The Precept-Law Offices.

The regulator has also noted that the conduct fell within the definition of prohibited dark patterns under the Guidelines for Prevention and Regulation of Dark Patterns, 2023, specifically drip pricing and basket sneaking.

Dark patterns are defined as any practice or “deceptive design pattern" using user interface or user experience interactions on any platform that is designed to mislead or trick users to do something they originally did not intend or want to do. These practices include those subverting or impairing consumer autonomy, decision-making, or choice. The government has identified 13 dark patterns——false urgency, basket sneaking, confirm shaming, forced action, subscription trap, interface interference, bait and switch, drip pricing, disguised advertisement, nagging, trick question, SaaS billing and rogue malware.

As per the order, the CCPA took suo motu cognizance of the matter against Zepto Marketplace Pvt Ltd (Zepto) based on its routine analysis and examination of various e-commerce platforms regarding the prevalence of dark patterns resembling unfair trade practices under the Consumer Protection Act, 2019.

During the examination, the CCPA noticed that the Zepto platform showed a lower initial price at the time of selection of items; however, the prices were higher when the cart page was accessed. When a consumer proceeded to the final page, an increased price was displayed due to the addition of a handling charge and the Zepto Pass membership fee. These additional charges and fees were not disclosed at the initial stage of selection.

As per the order, the CCPA team conducted a reality test on 2 January 2025 and observed that an item, Colossal Kajal, was offered for ₹170, including all taxes, but when the item was added to the cart and the user opened the cart, the final price of the product was shown as ₹177.44, including a handling charge and the Zepto Pass membership fee. This appeared to be misleading and an unfair trade practice by deploying the dark pattern of drip pricing, it said.

The authority said that these charges were not disclosed at the beginning of the transaction and appeared only late in the purchase flow, impairing a consumer’s ability to make an informed choice. This, the regulator said, is a clear instance of drip pricing, which is prohibited under Para 4(12) of the dark patterns guidelines.

The investigation also found instances of basket sneaking, where optional items such as Zepto Pass or add-ons appeared pre-selected in the cart, requiring consumers to uncheck them manually. Such auto-opt-in features are prohibited under Para 4(1) of the 2023 guidelines. The CCPA also cited design choices such as highlighting certain payment options or discounts in a way that nudged users into selecting costlier options, categorising this as interface interference, another dark pattern.

During the final hearing, which was attended by Ashutosh Shekhar Paarcha, head of litigation at Zepto, the company argued that all fees displayed on the platform were already disclosed in the terms of use and that any additional amount payable by a consumer was clearly indicated.

Zepto also emphasised that these were not fees imposed by Zepto itself; rather, they were charges levied by individual sellers, and the amounts collected were passed on to the sellers and not retained as profit by Zepto.

Zepto, during the hearing, said that the charges reflected operational realities such as delivery costs, labour, packaging and rain surcharges. The platform added that it had modified the user interface to remove pre-selected features and improve clarity.

However, the CCPA said that these changes were made only after regulatory intervention and did not mitigate earlier violations.

The regulator also held that Zepto’s price disclosures breached the Guidelines for Prevention of Misleading Advertisements, 2022, which require clear disclosure of the total price at the start of the transaction. By showing a low initial price and increasing it at checkout, the company also violated Rule 6 of the Legal Metrology (Packaged Commodities) Rules, 2011, which requires all-inclusive pricing for packaged goods sold online.

In its final directions, the CCPA ordered Zepto to stop using dark patterns on its platform, ensure upfront disclosure of all mandatory charges, redesign its user interface to comply with consumer-protection norms and submit compliance within 15 days.

Earlier, ride-hailing service Rapido was fined ₹10,00,000 by the CCPA in August for misleading advertising practices, with the authority further directing the company to reimburse customers who used its “Auto in 5 minutes or Get ₹50" offer but did not receive the promised reimbursement. Later in August, VLCC Ltd was penalised ₹300,000 for publishing misleading advertisements related to slimming treatments. In October, the CCPA imposed a penalty of ₹500,000 on Drishti IAS (VDK Eduventures Pvt Ltd) for publishing misleading advertisements regarding the results of the UPSC Civil Services Examination (CSE) 2022.

In the case of coaching institutes, the CCPA has issued 54 notices for misleading advertisements and unfair trade practices. Penalties amounting to over ₹90,60,000 have been imposed on 26 coaching institutes, along with directions to discontinue such misleading claims.

The CCPA was established in 2020 under the Consumer Protection Act 2019, to regulate matters relating to consumer rights violations, unfair trade practices, and false advertisements.

India’s consumer protection regime has been strengthened in recent years. The Consumer Protection Act of 1986 was replaced by the Consumer Protection Act of 2019 to modernize the framework governing consumer protection in the era of globalization, technology and e-commerce.