Is food a good?

Consumers would place reliance on the SOGA to hold sellers liable for the cost of preparing goods for delivery. However, a possible argument is that the restaurants do not sell goods but offer a service for transactions on online platforms. Goods include every kind of movable property in the Sale of Goods Act, while food is explicitly included in the expansive definition provided in the Consumer Protection Act 2019 (CPA). Service has also been defined in inclusive terms as a service of any description which is made available to potential users. Restaurants provide dining as a service, which includes elements such as preparation, ambience, hygiene, and waiting on customers. The transaction is composite and contains elements of both goods and services. However, most of the servicial aspects are absent in online delivery since the food items are merely bought for consumption, and the dining service provided by restaurants is not available in this form of transaction. The element of service is minimal as food delivery is analogous to takeaway and is primarily a sale of goods.

Are the hidden charges a dark pattern?

Dark Patterns are deceptive design practices in user interface or user experience that mislead or trick users into actions they did not intend, by subverting or impairing consumer autonomy, decision-making, or choice, amounting to misleading advertisement, unfair trade practice, or violation of consumer rights. Drip Pricing has been recognised as a dark pattern in the Guidelines for Prevention and Regulation of Dark Patterns 2023 (Guidelines). These guidelines are applicable to both the platforms and the sellers. It is considered ‘drip pricing’ when the elements of the full price are not revealed upfront or are revealed surreptitiously within the user experience. Most online delivery companies employ drip pricing to showcase the items in their application. After selecting an item, these applications show a different and often larger final price for the selected article. This is because the application adds various elements such as platform fees, packaging fees, processing fees, handling fees, delivery fees and taxes to the base price of the selected item, and these charges remain hidden in the final price. The breakdown of the full price is only revealed after the amount to be paid button is expanded. Since these guidelines are applicable to sellers and platforms, both the restaurants and delivery applications shall be liable for violations of these guidelines.

What do the courts say?

Restaurants cannot use any unfair trade practices to sell their goods or services on an online platform or elsewhere. An unfair trade practice is defined as a trade practice that adopts any unfair method or unfair or deceptive practice, including the adoption of such practices in the provision of services. Moreover, those contracts between a service provider and a consumer having such terms which cause a significant change in the rights of such consumer are also barred as unfair contracts. Any contract that imposes any unreasonable charge, obligation, or condition on the consumer that puts them at a disadvantage would fall under the ambit of an unfair contract in the Act. Consumer courts have consistently held that sellers on online platforms cannot charge for the packaging of food articles. The Government has also notified that the price of the product or the service at restaurants must include all operating costs involved in the making and delivery of the product or service. However, this was challenged in a recent case where the Delhi High Court affirmed the notification as constitutionally valid. It was held that the collection of mandatory service charges constitutes an unfair trade practice under the CPA. Likewise, packaging charges are also added by default in addition to the total price of the food items and applicable taxes. It is already established that every seller must prepare goods in a condition ready for the buyer to receive. This means the restaurants must ensure that the food article is adequately prepared for the handover to the delivery agents. As food is a good, the seller is responsible for all expenses related to delivery under Section 36(5) of the SOGA. Accordingly, consumer rights cannot be subjugated on the ground that a contract is being entered into by the consumer in ordering a meal to accept the charges, when the payment and collection of such charges is itself contrary to law. Such a contract would be untenable as an unfair contract since it imposes unreasonable charges on the consumer. Therefore, it is prohibited to impose an additional charge for packaging beyond the final price, as with a service charge.

Central Consumer Protection Authority (CCPA) has the power to investigate complaints relating to violations of consumer rights, unfair trade practices or misleading advertisements on its motion, upon receiving a complaint and upon receiving a reference from the government. While consumers have often received favourable orders from the consumer courts, the CCPA has not taken any action to prevent entities from charging extra amounts in the name of spurious charges. As a result, online delivery platforms are increasingly using dark patterns to impose additional packaging fees on customers.