Deceptive Design

Throughout the years, companies have adapted enhanced techniques in order to ensure maximisation of revenue. One of these techniques includes Dark Patterns (also known as deceptive design patterns), which refer to unethical user interface interactions, designed to mislead consumers into practices aimed at benefiting a corporation. While these patterns can boost short-term revenues, their long-tem impact on companies remains contentious. In 2024, a study conducted by the Federal Trade Commission (FTC) and the International Consumer Protection and Enforcement Network (ICPEN) found that nearly 76% of 642 websites and mobile applications used at least one dark pattern, portraying the prevalence of this method in today's world. This article examines the economic rationale justifying the use of dark patterns, depicting how these manipulative design techniques provide short-term financial gains for enterprises while conversely bringing harmful long-term consequences through their unethical means of functioning.

Enterprises have started to adopt dark patterns in search of enhancing their income since dark patterns facilitate revenue maximisation through specific tactics such as auto-renewals, in which a user who has opted for a free subscription is automatically altered to a paid subscription, capitalising on user inattention, which can substantially boost conversion rates. Manipulative design elements also may be used to facilitate revenue maximisation; these elements include the placement of specific functions; for instance, hiding or placing a cancel button for a subscription to where it is difficult to find can potentially lead to a higher number of consumers retaining their subscription longer than they would otherwise. These techniques lead to the growth of a sense of commitment within users, which consequently leads to higher revenue generation and retention rates.

In addition to increase in revenue, these techniques also contribute to a more efficient cost management structure. In an instance where these customers are automatically shifted to a paid version, companies are not compelled to spend excessive amounts of funds on traditional advertising measures, thereby reducing their customer acquisition costs (CAC). For instance, the use of misleading discounts or flashing prompts can nudge users into making impetuous purchases with minimum leveraging of other marketing initiatives. Additionally, companies further complicate processes, which essentially complicates a process such as cancellations, thereby minimising the cost associated for customer services to deal with cancellation-related problems. These advantages normally encourage companies to adopt these dark patterns as a base for profitability.

However, these short-term benefits come at the expense of long-term sustainability; usage of these dark patterns come with the risk of significantly impairing a company's brand image and diminishing consumer trust and loyalty. When customers realise their exploitation, it may lead to higher churn rates since one would likely disengage with the brand; negative feedback may also be circulated on social media and through word of mouth warning other possible consumers of the manipulative interface. The loss of trust can diminish the lifetime value of these customers, making it harder for enterprises to maintain steady revenue streams. In addition, as the awareness of unethical design practices increases, regulatory bodies have shown to become more vigilant by the establishment of regulations such as the General Data Protection Regulation (GDPR) which impose rigid restrictions on customer transparency and user consent. Non-compliance could result in hefty fines and legal fees, further wrecking a company's financial status.

Regulatory bodies are increasingly taking action towards dark patterns. Notably, the European Union has also established the Digital Services Act (DSA) that aims to create a safer experience for consumers. AT&T, along with other mega corporations, has recently faced charges of over $105 million for the usage of dark patterns that added unauthorised fees for services onto customers' phone bills, without their knowledge or consent. As mandates procure a more stern foundation, companies are reconsidering their decision of adopting dark patterns which could potentially result in extensive compliance costs and a need for redesigning the user interface to synchronise with ethical standards.

In a world where most companies are chasing short-term financial gain through dark patterns by exploiting their customers, a company which maintains its customers' trust and loyalty is more likely to stand-out and benefit in the long-term. Not only does the company with an ethical user interface maintain its reputation, but is also preferred over other corporations as consumers are becoming more conscious.

In conclusion, while dark patterns may offer short-term financial gains, they still lack long-term sustainability and dependence. These deceptive design elements come with significant risks such as a tarnished brand image and reputation. In today's consumer landscape, it is necessary to maintain a customer's trust through an ethical user interface in order to ensure long-term profitability, achieve customer loyalty, and maintain reputation.