Chinese Clandestine APT41 Group Activities
Introduction
A famous quote, “Half knowledge is always dangerous”, but “Too much knowledge of anything can lead to destruction”. Recently very infamous spyware and malware named WyrmSpy and Dragon Egg were invented by a Chinese group of hackers APT41. The APT41 is a state-endorsed Clandstein active group based in the People’s Republic of China that has been active since 2012. In contrast to numerous countries-government supported, APT has a footprint record jeopardising both government organisations for clandestine activities as well as different private organisations or enterprises for their financial gain. APT41 group aims at Android devices through spyware wyrmspy and dragon egg, which masquerades as a legitimate application. According to the U.S. jury legal accusation from 2019 to 2020, the group was entangled in threatening over more than 100 public and private individuals and organisations in the United States and around the world.Moreover, a detailed analysis report was shared by the Lookout Threat Researchers, that has been actively monitoring and tracking both spyware and malware.
Briefing about how spyware attacks on Android devices take place
To begin with, this malware imitates a real source Android application to show some sort of notification. Once it is successfully installed on the user’s machine, proclaims multiple device’s permission to enable data filtration.
Wyrmspy complies with log files, photos, device locations, SMS(read and write), and audio recordings. It has also authenticated that there are no detection malware activities found on google play even after running multiple security levels. These malicious things are made with the intent to obtain rooting access privileges to the device and monitor activities to the specified commands received from the C2 servers.
Similarly, Dragon Egg can collect data files, contacts, locations, and audio recordings, and it also accesses camera photos once it successfully trade-off the device. Dragon egg receives a payload that is also known as “smallmload.jar”, which is either from APK(Android Packet Kit).
WyrmSpy initially masquerades as a default operation system application, and Dragon Egg simulates a third-party keyboard/ messaging application.
Overview of APT41 Chinese group background
APT41 is a Chinese-based stealth activity-carrying group that is said to be active since mid-2006. Rumours about APT41 that it was also a part of the 2nd Bureau of the People’s Liberation Army (PLA) General Staff Department’s (GSD) 3rd Department. Owning to that fact, 2006 has seen 140+ organisations’ security getting compromised, ranging from 20 strategically crucial companies.APT is also recognised for rationally plundering hundreds of terabytes of data from at least 141 organisations between 2006 and 2013. It typically begins with spear-phishing emails to the targeted victims. These sent emails contain official templates along with language pretending to be from a legitimate real source, carrying a malicious attachment. As the victim opens the attached file, the backdoor bestows the control of the targeted machine to the APT groups machine. Once there is an unauthorised gain of access, the attacker visits and revisits the victim’s machine. The group remains dormant for lengthy durations, more likely for months or even for years.
Advisory points need to adhere to while using Android devices
- The security patch update is necessary at least once a week
- Clearing up unwanted junk files.
- Cache files of every frequently used application need to clear out.
- Install only required applications from
Google play store. - Download only necessary APK files only it comes from trusted resources.
- Before giving device permission, it is advisable to run your files or URLs on VirusTotal.com this website will give a good closure to the malicious intent.
- Install good antivirus software.
- Individuals need to check the source of the email before opening an attachment to it.
- Never collect or add any randomly found device to your system
- Moreover, the user needs to keep track of their device activity. Rather than using devices just for entertainment purposes, it is more important to look for data protection on that device.
Conclusion
Network Crack Program Hacker Group (NCPH), which grew as an APT41 group with malicious intent, earlier performed the role of grey hat hacker, this group somehow grew up greedy to enhance more money laundering by hacking networks, devices, etc. As this group conducts a supply chain of attacks to gain unauthorised access to the network throughout the world, targeting hundreds of companies, including an extensive selection of industries such as social media, telecommunications, government, defence, education, and manufacturing. Last but not least, many more fraud-making groups with malicious intent will be forming and implementing in the future. It is on individuals and organisations to secure themselves but practise basic security levels to safeguard themselves against such threats and attacks.
Related Blogs
Overview:
The rapid digitization of educational institutions in India has created both opportunities and challenges. While technology has improved access to education and administrative efficiency, it has also exposed institutions to significant cyber threats. This report, published by CyberPeace, examines the types, causes, impacts, and preventive measures related to cyber risks in Indian educational institutions. It highlights global best practices, national strategies, and actionable recommendations to mitigate these threats.
Significance of the Study:
The pandemic-induced shift to online learning, combined with limited cybersecurity budgets, has made educational institutions prime targets for cyberattacks. These threats compromise sensitive student, faculty, and institutional data, leading to operational disruptions, financial losses, and reputational damage. Globally, educational institutions face similar challenges, emphasizing the need for universal and localized responses.
Threat Faced by Education Institutions:
Based on the insights from the CyberPeace’s report titled 'Exploring Cyber Threats and Digital Risks in Indian Educational Institutions', this concise blog provides a comprehensive overview of cybersecurity threats and risks faced by educational institutions, along with essential details to address these challenges.
🎣 Phishing: Phishing is a social engineering tactic where cyber criminals impersonate trusted sources to steal sensitive information, such as login credentials and financial details. It often involves deceptive emails or messages that lead to counterfeit websites, pressuring victims to provide information quickly. Variants include spear phishing, smishing, and vishing.
💰 Ransomware: Ransomware is malware that locks users out of their systems or data until a ransom is paid. It spreads through phishing emails, malvertising, and exploiting vulnerabilities, causing downtime, data leaks, and theft. Ransom demands can range from hundreds to hundreds of thousands of dollars.
🌐 Distributed Denial of Service (DDoS): DDoS attacks overwhelm servers, denying users access to websites and disrupting daily operations, which can hinder students and teachers from accessing learning resources or submitting assignments. These attacks are relatively easy to execute, especially against poorly protected networks, and can be carried out by amateur cybercriminals, including students or staff, seeking to cause disruptions for various reasons
🕵️ Cyber Espionage: Higher education institutions, particularly research-focused universities, are vulnerable to spyware, insider threats, and cyber espionage. Spyware is unauthorized software that collects sensitive information or damages devices. Insider threats arise from negligent or malicious individuals, such as staff or vendors, who misuse their access to steal intellectual property or cause data leaks..
🔒 Data Theft: Data theft is a major threat to educational institutions, which store valuable personal and research information. Cybercriminals may sell this data or use it for extortion, while stealing university research can provide unfair competitive advantages. These attacks can go undetected for long periods, as seen in the University of California, Berkeley breach, where hackers allegedly stole 160,000 medical records over several months.
🛠️ SQL Injection: SQL injection (SQLI) is an attack that uses malicious code to manipulate backend databases, granting unauthorized access to sensitive information like customer details. Successful SQLI attacks can result in data deletion, unauthorized viewing of user lists, or administrative access to the database.
🔍Eavesdropping attack: An eavesdropping breach, or sniffing, is a network attack where cybercriminals steal information from unsecured transmissions between devices. These attacks are hard to detect since they don't cause abnormal data activity. Attackers often use network monitors, like sniffers, to intercept data during transmission.
🤖 AI-Powered Attacks: AI enhances cyber attacks like identity theft, password cracking, and denial-of-service attacks, making them more powerful, efficient, and automated. It can be used to inflict harm, steal information, cause emotional distress, disrupt organizations, and even threaten national security by shutting down services or cutting power to entire regions
Insights from Project eKawach
The CyberPeace Research Wing, in collaboration with SAKEC CyberPeace Center of Excellence (CCoE) and Autobot Infosec Private Limited, conducted a study simulating educational institutions' networks to gather intelligence on cyber threats. As part of the e-Kawach project, a nationwide initiative to strengthen cybersecurity, threat intelligence sensors were deployed to monitor internet traffic and analyze real-time cyber attacks from July 2023 to April 2024, revealing critical insights into the evolving cyber threat landscape.
Cyber Attack Trends
Between July 2023 and April 2024, the e-Kawach network recorded 217,886 cyberattacks from IP addresses worldwide, with a significant portion originating from countries including the United States, China, Germany, South Korea, Brazil, Netherlands, Russia, France, Vietnam, India, Singapore, and Hong Kong. However, attributing these attacks to specific nations or actors is complex, as threat actors often use techniques like exploiting resources from other countries, or employing VPNs and proxies to obscure their true locations, making it difficult to pinpoint the real origin of the attacks.
Brute Force Attack:
The analysis uncovered an extensive use of automated tools in brute force attacks, with 8,337 unique usernames and 54,784 unique passwords identified. Among these, the most frequently targeted username was “root,” which accounted for over 200,000 attempts. Other commonly targeted usernames included: "admin", "test", "user", "oracle", "ubuntu", "guest", "ftpuser", "pi", "support"
Similarly, the study identified several weak passwords commonly targeted by attackers. “123456” was attempted over 3,500 times, followed by “password” with over 2,500 attempts. Other frequently targeted passwords included: "1234", "12345", "12345678", "admin", "123", "root", "test", "raspberry", "admin123", "123456789"
Insights from Threat Landscape Analysis
Research done by the USI - CyberPeace Centre of Excellence (CCoE) and Resecurity has uncovered several breached databases belonging to public, private, and government universities in India, highlighting significant cybersecurity threats in the education sector. The research aims to identify and mitigate cybersecurity risks without harming individuals or assigning blame, based on data available at the time, which may evolve with new information. Institutions were assigned risk ratings that descend from A to F, with most falling under a D rating, indicating numerous security vulnerabilities. Institutions rated D or F are 5.4 times more likely to experience data breaches compared to those rated A or B. Immediate action is recommended to address the identified risks.
Risk Findings :
The risk findings for the institutions are summarized through a pie chart, highlighting factors such as data breaches, dark web activity, botnet activity, and phishing/domain squatting. Data breaches and botnet activity are significantly higher compared to dark web leakages and phishing/domain squatting. The findings show 393,518 instances of data breaches, 339,442 instances of botnet activity, 7,926 instances related to the dark web and phishing & domain activity - 6711.
Key Indicators: Multiple instances of data breaches containing credentials (email/passwords) in plain text.
- Botnet activity indicating network hosts compromised by malware.
- Credentials from third-party government and non-governmental websites linked to official institutional emails
- Details of software applications, drivers installed on compromised hosts.
- Sensitive cookie data exfiltrated from various browsers.
- IP addresses of compromised systems.
- Login credentials for different Android applications.
Below is the sample detail of one of the top educational institutions that provides the insights about the higher rate of data breaches, botnet activity, dark web activities and phishing & domain squatting.
Risk Detection:
It indicates the number of data breaches, network hygiene, dark web activities, botnet activities, cloud security, phishing & domain squatting, media monitoring and miscellaneous risks. In the below example, we are able to see the highest number of data breaches and botnet activities in the sample particular domain.
Risk Changes:
Risk by Categories:
Risk is categorized with factors such as high, medium and low, the risk is at high level for data breaches and botnet activities.
Challenges Faced by Educational Institutions
Educational institutions face cyberattack risks, the challenges leading to cyberattack incidents in educational institutions are as follows:
🔒 Lack of a Security Framework: A key challenge in cybersecurity for educational institutions is the lack of a dedicated framework for higher education. Existing frameworks like ISO 27001, NIST, COBIT, and ITIL are designed for commercial organizations and are often difficult and costly to implement. Consequently, many educational institutions in India do not have a clearly defined cybersecurity framework.
🔑 Diverse User Accounts: Educational institutions manage numerous accounts for staff, students, alumni, and third-party contractors, with high user turnover. The continuous influx of new users makes maintaining account security a challenge, requiring effective systems and comprehensive security training for all users.
📚 Limited Awareness: Cybersecurity awareness among students, parents, teachers, and staff in educational institutions is limited due to the recent and rapid integration of technology. The surge in tech use, accelerated by the pandemic, has outpaced stakeholders' ability to address cybersecurity issues, leaving them unprepared to manage or train others on these challenges.
📱 Increased Use of Personal/Shared Devices: The growing reliance on unvetted personal/Shared devices for academic and administrative activities amplifies security risks.
💬 Lack of Incident Reporting: Educational institutions often neglect reporting cyber incidents, increasing vulnerability to future attacks. It is essential to report all cases, from minor to severe, to strengthen cybersecurity and institutional resilience.
Impact of Cybersecurity Attacks on Educational Institutions
Cybersecurity attacks on educational institutions lead to learning disruptions, financial losses, and data breaches. They also harm the institution's reputation and pose security risks to students. The following are the impacts of cybersecurity attacks on educational institutions:
📚Impact on the Learning Process: A report by the US Government Accountability Office (GAO) found that cyberattacks on school districts resulted in learning losses ranging from three days to three weeks, with recovery times taking between two to nine months.
💸Financial Loss: US schools reported financial losses ranging from $50,000 to $1 million due to expenses like hardware replacement and cybersecurity upgrades, with recovery taking an average of 2 to 9 months.
🔒Data Security Breaches: Cyberattacks exposed sensitive data, including grades, social security numbers, and bullying reports. Accidental breaches were often caused by staff, accounting for 21 out of 25 cases, while intentional breaches by students, comprising 27 out of 52 cases, frequently involved tampering with grades.
⚠️Data Security Breach: Cyberattacks on schools result in breaches of personal information, including grades and social security numbers, causing emotional, physical, and financial harm. These breaches can be intentional or accidental, with a US study showing staff responsible for most accidental breaches (21 out of 25) and students primarily behind intentional breaches (27 out of 52) to change grades.
🏫Impact on Institutional Reputation: Cyberattacks damaged the reputation of educational institutions, eroding trust among students, staff, and families. Negative media coverage and scrutiny impacted staff retention, student admissions, and overall credibility.
🛡️ Impact on Student Safety: Cyberattacks compromised student safety and privacy. For example, breaches like live-streaming school CCTV footage caused severe distress, negatively impacting students' sense of security and mental well-being.
CyberPeace Advisory:
CyberPeace emphasizes the importance of vigilance and proactive measures to address cybersecurity risks:
- Develop effective incident response plans: Establish a clear and structured plan to quickly identify, respond to, and recover from cyber threats. Ensure that staff are well-trained and know their roles during an attack to minimize disruption and prevent further damage.
- Implement access controls with role-based permissions: Restrict access to sensitive information based on individual roles within the institution. This ensures that only authorized personnel can access certain data, reducing the risk of unauthorized access or data breaches.
- Regularly update software and conduct cybersecurity training: Keep all software and systems up-to-date with the latest security patches to close vulnerabilities. Provide ongoing cybersecurity awareness training for students and staff to equip them with the knowledge to prevent attacks, such as phishing.
- Ensure regular and secure backups of critical data: Perform regular backups of essential data and store them securely in case of cyber incidents like ransomware. This ensures that, if data is compromised, it can be restored quickly, minimizing downtime.
- Adopt multi-factor authentication (MFA): Enforce Multi-Factor Authentication(MFA) for accessing sensitive systems or information to strengthen security. MFA adds an extra layer of protection by requiring users to verify their identity through more than one method, such as a password and a one-time code.
- Deploy anti-malware tools: Use advanced anti-malware software to detect, block, and remove malicious programs. This helps protect institutional systems from viruses, ransomware, and other forms of malware that can compromise data security.
- Monitor networks using intrusion detection systems (IDS): Implement IDS to monitor network traffic and detect suspicious activity. By identifying threats in real time, institutions can respond quickly to prevent breaches and minimize potential damage.
- Conduct penetration testing: Regularly conduct penetration testing to simulate cyberattacks and assess the security of institutional networks. This proactive approach helps identify vulnerabilities before they can be exploited by actual attackers.
- Collaborate with cybersecurity firms: Partner with cybersecurity experts to benefit from specialized knowledge and advanced security solutions. Collaboration provides access to the latest technologies, threat intelligence, and best practices to enhance the institution's overall cybersecurity posture.
- Share best practices across institutions: Create forums for collaboration among educational institutions to exchange knowledge and strategies for cybersecurity. Sharing successful practices helps build a collective defense against common threats and improves security across the education sector.
Conclusion:
The increasing cyber threats to Indian educational institutions demand immediate attention and action. With vulnerabilities like data breaches, botnet activities, and outdated infrastructure, institutions must prioritize effective cybersecurity measures. By adopting proactive strategies such as regular software updates, multi-factor authentication, and incident response plans, educational institutions can mitigate risks and safeguard sensitive data. Collaborative efforts, awareness, and investment in cybersecurity will be essential to creating a secure digital environment for academia.
Modern international trade heavily relies on data transfers for the exchange of digital goods and services. User data travels across multiple jurisdictions and legal regimes, each with different rules for processing it. Since international treaties and standards for data protection are inadequate, states, in an effort to protect their citizens' data, have begun extending their domestic privacy laws beyond their borders. However, this opens a Pandora's box of legal and administrative complexities for both, the data protection authorities and data processors. The former must balance the harmonization of domestic data protection laws with their extraterritorial enforcement, without overreaching into the sovereignty of other states. The latter must comply with the data privacy laws in all states where it collects, stores, and processes data. While the international legal community continues to grapple with these challenges, India can draw valuable lessons to refine the Digital Personal Data Protection Act, 2023 (DPDP) in a way that effectively addresses these complexities.
Why Extraterritorial Application?
Since data moves freely across borders and entities collecting such data from users in multiple states can misuse it or use it to gain an unfair competitive advantage in local markets, data privacy laws carry a clause on their extraterritorial application. Thus, this principle is utilized by states to frame laws that can ensure comprehensive data protection for their citizens, irrespective of the data’s location. The foremost example of this is the European Union’s (EU) General Data Protection Regulation (GDPR), 2016, which applies to any entity that processes the personal data of its citizens, regardless of its location. Recently, India has enacted the DPDP Act of 2023, which includes a clause on extraterritorial application.
The Extraterritorial Approach: GDPR and DPDP Act
The GDPR is considered the toughest data privacy law in the world and sets a global standard in data protection. According to Article 3, its provisions apply not only to data processors within the EU but also to those established outside its territory, if they offer goods and services to and conduct behavioural monitoring of data subjects within the EU. The enforcement of this regulation relies on heavy penalties for non-compliance in the form of fines up to €20 million or 4% of the company’s global turnover, whichever is higher, in case of severe violations. As a result, corporations based in the USA, like Meta and Clearview AI, have been fined over €1.5 billion and €5.5 million respectively, under the GDPR.
Like the GDPR, the DPDP Act extends its jurisdiction to foreign companies dealing with personal data of data principles within Indian territory under section 3(b). It has a similar extraterritorial reach and prescribes a penalty of up to Rs 250 crores in case of breaches. However, the Act or DPDP Rules, 2025, which are currently under deliberation, do not elaborate on an enforcement mechanism through which foreign companies can be held accountable.
Lessons for India’s DPDP on Managing Extraterritorial Application
- Clarity in Definitions: GDPR clearly defines ‘personal data’, covering direct information such as name and identification number, indirect identifiers like location data, and, online identifiers that can be used to identify the physical, physiological, genetic, mental, economic, cultural, or social identity of a natural person. It also prohibits revealing special categories of personal data like religious beliefs and biometric data to protect the fundamental rights and freedoms of the subjects. On the other hand, the DPDP Act/ Rules define ‘personal data’ vaguely, leaving a broad scope for Big Tech and ad-tech firms to bypass obligations.
- International Cooperation: Compliance is complex for companies due to varying data protection laws in different countries. The success of regulatory measures in such a scenario depends on international cooperation for governing cross-border data flows and enforcement. For DPDP to be effective, India will have to foster cooperation frameworks with other nations.
- Adequate Safeguards for Data Transfers: The GDPR regulates data transfers outside the EU via pre-approved legal mechanisms such as standard contractual clauses or binding corporate rules to ensure that the same level of protection applies to EU citizens’ data even when it is processed outside the EU. The DPDP should adopt similar safeguards to ensure that Indian citizens’ data is protected when processed abroad.
- Revised Penalty Structure: The GDPR mandates a penalty structure that must be effective, proportionate, and dissuasive. The supervisory authority in each member state has the power to impose administrative fines as per these principles, up to an upper limit set by the GDPR. On the other hand, the DPDP’s penalty structure is simplistic and will disproportionately impact smaller businesses. It must take into regard factors such as nature, gravity, and duration of the infringement, its consequences, compliance measures taken, etc.
- Governance Structure: The GDPR envisages a multi-tiered governance structure comprising of
- National-level Data Protection Authorities (DPAs) for enforcing national data protection laws and the GDPR,
- European Data Protection Supervisor (EDPS) for monitoring the processing of personal data by EU institutions and bodies,
- European Commission (EC) for developing GDPR legislation
- European Data Protection Board (EDPB) for enabling coordination between the EC, EDPS, and DPAs
In contrast, the Data Protection Board (DPB) under DPDP will be a single, centralized body overseeing compliance and enforcement. Since its members are to be appointed by the Central Government, it raises questions about the Board’s autonomy and ability to apply regulations consistently. Further, its investigative and enforcement capabilities are not well defined.
Conclusion
The protection of the human right to privacy ( under the International Covenant on Civil and Political Rights and the Universal Declaration of Human Rights) in today’s increasingly interconnected digital economy warrants international standard-setting on cross-border data protection. In the meantime, States relying on the extraterritorial application of domestic laws is unavoidable. While India’s DPDP takes measures towards this, they must be refined to ensure clarity regarding implementation mechanisms. They should push for alignment with data protection laws of other States, and account for the complexity of enforcement in cases involving extraterritorial jurisdiction. As India sets out to position itself as a global digital leader, a well-crafted extraterritorial framework under the DPDP Act will be essential to promote international trust in India’s data governance regime.
Sources
- https://gdpr-info.eu/art-83-gdpr/
- https://gdpr-info.eu/recitals/no-150/
- https://gdpr-info.eu/recitals/no-51/
- https://www.meity.gov.in/static/uploads/2024/06/2bf1f0e9f04e6fb4f8fef35e82c42aa5.pdf
- https://www.eqs.com/compliance-blog/biggest-gdpr-fines/#:~:text=ease%20the%20burden.-,At%20a%20glance,In%20summary
- https://gdpr-info.eu/art-3-gdpr/
- https://www.legal500.com/developments/thought-leadership/gdpr-v-indias-dpdpa-key-differences-and-compliance-implications/#:~:text=Both%20laws%20cover%20'personal%20data,of%20personal%20data%20as%20sensitive.
The rapid innovation of technology and its resultant proliferation in India has integrated businesses that market technology-based products with commerce. Consumer habits have now shifted from traditional to technology-based products, with many consumers opting for smart devices, online transactions and online services. This migration has increased potential data breaches, product defects, misleading advertisements and unfair trade practices.
The need to regulate technology-based commercial industry is seen in the backdrop of various threats that technologies pose, particularly to data. Most devices track consumer behaviour without the authorisation of the consumer. Additionally, products are often defunct or complex to use and the configuration process may prove to be lengthy with a vague warranty.
It is noted that consumers also face difficulties in the technology service sector, even while attempting to purchase a product. These include vendor lock-ins (whereby a consumer finds it difficult to migrate from one vendor to another), dark patterns (deceptive strategies and design practices that mislead users and violate consumer rights), ethical concerns etc.
Against this backdrop, consumer laws are now playing catch up to adequately cater to new consumer rights that come with technology. Consumer laws now have to evolve to become complimentary with other laws and legislation that govern and safeguard individual rights. This includes emphasising compliance with data privacy regulations, creating rules for ancillary activities such as advertising standards and setting guidelines for both product and product seller/manufacturer.
The Legal Framework in India
Currently, Consumer Laws in India while not tech-targeted, are somewhat adequate; The Consumer Protection Act 2019 (“Act”) protects the rights of consumers in India. It places liability on manufacturers, sellers and service providers for any harm caused to a consumer by faulty/defective products. As a result, manufacturers and sellers of ‘Internet & technology-based products’ are brought under the ambit of this Act. The Consumer Protection Act 2019 may also be viewed in light of the Digital Personal Data Protection Act 2023, which mandates the security of the digital personal data of an individual. Envisioned provisions such as those pertaining to mandatory consent, purpose limitation, data minimization, mandatory security measures by organisations, data localisation, accountability and compliance by the DPDP Act can be applied to information generated by and for consumers.
Multiple regulatory authorities and departments have also tasked themselves to issue guidelines that imbibe the principle of caveat venditor. To this effect, the Networks & Technologies (NT) wing of the Department of Telecommunications (DoT) on 2 March 2023, issued the Advisory Guidelines to M2M/IoT stakeholders for securing consumer IoT (“Guidelines”) aiming for M2M/IoT (i.e. Machine to Machine/Internet of things) compliance with the safety and security standards and guidelines in order to protect the users and the networks that connect these devices. The comprehensive Guidelines suggest the removal of universal default passwords and usernames such as “admin” that come preprogrammed with new devices and mandate the password reset process to be done after user authentication. Web services associated with the product are required to use Multi-Factor Authentication and duty is cast on them to not expose any unnecessary user information prior to authentication. Further, M2M/IoT stakeholders are required to provide a public point of contact for reporting vulnerability and security issues. Such stakeholders must also ensure that the software components are updateable in a secure and timely manner. An end-of-life policy is to be published for end-point devices which states the assured duration for which a device will receive software updates.
The involvement of regulatory authorities depends on the nature of technology products; a single product or technical consumer threat may see multiple guidelines. The Advertising Standards Council of India (ASCI) notes that cryptocurrency and related products were considered as the most violative category to commit fraud. In an attempt to protect consumer safety, it introduced guidelines to regulate advertising and promotion of virtual digital assets (VDA) exchange and trading platforms and associated services as a necessary interim measure in February 2022. It mandates that all VDA ads must carry the stipulated disclaimer “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” must be made in a prominent and unmissable manner.
Further, authorities such as Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) also issue cautionary notes to consumers and investors against crypto trading and ancillary activities. Even bodies like Bureau of Indian Standards (BIS) act as a complimenting authority, since product quality, including electronic products, is emphasised by mandating compliance to prescribed standards.
It is worth noting that ASCI has proactively responded to new-age technology-induced threats to consumers by attempting to tackle “dark patterns” through its existing Code on Misleading Ads (“Code”), since it is applicable across media to include online advertising on websites and social media handles. It was noted by ASCI that 29% of advertisements were disguised ads by influencers, which is a form of dark pattern. Although the existing Code addressed some issues, a need was felt to encompass other dark patterns.
Perhaps in response, the Central Consumer Protection Authority in November 2023 released guidelines addressing “dark patterns” under the Consumer Protection Act 2019 (“Guidelines”). The Guidelines define dark patterns as deceptive strategies and design practices that mislead users and violate consumer rights. These may include creating false urgency, scarcity or popularity of a product, basket sneaking (whereby additional services are added automatically on purchase of a product or service), confirm shaming (it refers to statements such as “I will stay unsecured” when opting out of travel insurance on booking of transportation tickets), etc. The Guidelines also cater to several data privacy considerations; for example, they stipulate a bar on encouraging consumers from divulging more personal information while making purchases due to difficult language and complex settings of their privacy policies, thereby ensuring compliance of technology product sellers and e-commerce platforms/vendors with data privacy laws in India. It is to be noted that the Guidelines are applicable on all platforms that systematically offer goods and services in India, advertisers and sellers.
Conclusion
Consumer laws for technology-based products in India play a pivotal role in safeguarding the rights and interests of individuals in an era marked by rapid technological advancements. These legislative frameworks, spanning facets such as data protection, electronic transactions, and product liability, assume a pivotal role in establishing a regulatory equilibrium that addresses the nuanced challenges of the digital age. The dynamic evolution of the digital landscape necessitates an adaptive legal infrastructure that ensures ongoing consumer safeguarding amidst technological innovations. As the digital landscape evolves, it is imperative for regulatory frameworks to adapt, ensuring that consumers are protected from potential risks associated with emerging technologies. Striking a balance between innovation and consumer safety requires ongoing collaboration between policymakers, businesses, and consumers. By staying attuned to the evolving needs of the digital age, Indian consumer laws can provide a robust foundation for security and equitable relationships between consumers and technology-based products.
References:
- https://dot.gov.in/circulars/advisory-guidelines-m2miot-stakeholders-securing-consumer-iot
- https://www.mondaq.com/india/advertising-marketing--branding/1169236/asci-releases-guidelines-to-govern-ads-for-cryptocurrency
- https://www.ascionline.in/the-asci-code/#:~:text=Chapter%20I%20(4)%20of%20the,nor%20deceived%20by%20means%20of
- https://www.ascionline.in/wp-content/uploads/2022/11/dark-patterns.pdf
