Author : Pradipta Roy from National Law University Odisha
- Introduction
The significant reconfiguration of the Indian marketplace from the traditional brick-and-mortar model to the modern data-driven digital marketplace has created a parallel imperative for the development of the Indian consumer jurisprudence. As we navigate the period between 2024 and 2026, the “intersection of Artificial Intelligence (AI), consumer protection, and dispute resolution” has been the most significant frontier of Indian legal scholarship and policy intervention. While the development of the digital marketplace has created a significant shift in ‘the locus of power between commercial entities and the end-consumer.’ This is particularly true in the context of a judicial system that is replete with over 40 million cases and where litigation is often a deterrent to justice rather than a facilitator of it.
- The Algorithmic Consumer And Information Asymmetry
The modern digital market environment has witnessed the rise of autonomous systems that operate on large datasets to shape consumer behavior, prices, and service availability. This “algorithmic revolution” has ushered in a new kind of vulnerability. In its landmark ‘market study on Artificial Intelligence and Competition’ released in October 2025, the ‘Competition Commission of India (CCI)’ identified that “while AI has tremendous scope in increasing efficiency and driving innovation, it has the potential to significantly increase information asymmetry. “ Businesses today have access to micro-level intelligence on consumer preference patterns, price elasticity curves, and purchase behaviour that was hitherto inaccessible. This allows for flexible pricing strategies that may extract the maximum consumer surplus while remaining undetectable to the end-user.
The growth of the AI market in India, which is projected to grow from ‘USD 7.84 billion in 2025 to USD 31.94 billion in 2031,’ shows that these technologies are not peripheral but central to the future of India’s economy. The fact is, however, that this has happened faster than the creation of specific regulatory safeguards. The “black box” nature of AI means that when a consumer is denied credit or is required to pay a higher premium for insurance, it is not clear why. The very ‘principles of accountability’ and ‘rule of law’ are undermined.
Table 1: AI Market Size and Growth Multipliers in India (2022-2031)
| AI Market Metric (India) | 2020 (Actual) | 2024 (Actual) | 2025 (Projected) | 2031 (Projected) |
| Market Size (USD Billion) | 3.20 | 6.05 | 7.84 | 31.94 |
| Growth Multiplier (from 2020) | – | 1.89x | 2.45x | 9.98x |
The implications of the growth are significant. Since 67% of AI startups in India are more concerned with the development of applications rather than the actual model, the interface where AI and the consumer interact has the highest potential for manipulation and bias, and so the relevance of the mission that the CCRP has set out to achieve in the development of consumer welfare.
- Deceptive Architectures: The Regulation Of Dark Patterns
One of the more nefarious trends in the digital marketplace has been the development and utilization of so-called dark patterns, or deceptive user interface and experience strategies aimed at duping consumers into engaging in actions that are ultimately detrimental to their own well-being and interests. By 2025, a study conducted by Local Circles discovered that a whopping 97% of major online platforms in India had implemented some level of dark pattern.
In response, the ‘Central Consumer Protection Authority (CCPA)’ issued guidelines on ‘Prevention and Regulation of Dark Patterns in November 2023.’ These guidelines outline thirteen specified dark patterns that ‘constitute unfair trade practices under the Consumer Protection Act, 2019.’ From identification to enforcement, this was a hallmark of the 2024-2025 period. For example, in ‘Ashwani Chawla v. Flipkart Internet Pvt Ltd,’ a judgment was passed by the ‘State Consumer Disputes Redressal Commission (SCDRC) Chandigarh’ in 2024, applying the guidelines of 2023, which marked a significant signal to the industry that deceptive digital designs would no longer be tolerated in the name of innovative marketing.
The CCPA’s order dated June 19, 2024, against IndiGo Airlines was another example of the changing landscape in the same direction. In this case, the airline was asked to rectify its online check-in system that used confirm shaming to promote paid seat selection by using ‘No, I will take the risk’ for auto-assignment selections.
- Algorithmic Accountability And ‘The Right To Explanation’
The use of AI in the decision-making process in credit, insurance, and employment has called for a rigorous framework of algorithmic accountability. In response to this challenge, the ‘Artificial Intelligence (Ethics and Accountability) Bill 2025’ has been proposed and introduced in the legal arena with the aim of laying down a robust ethics framework. This bill has emphasized the importance of the following in AI systems involved in decision-making processes: they should not be based on race, religion, and gender.
Furthermore, the concept of a Right to Explanation is gaining traction, potentially mandating that AI providers offer human-readable logic trails for their automated outcomes. The Kerala High Court’s policy ‘regarding the use of AI in the district judiciary (2025)’ sets a national standard by mandating human oversight to prevent ‘AI hallucinations’, ensuring that AI remains an assistive tool rather than a decision maker.
Table 2: Key Legislative and Regulatory Frameworks for AI Accountability
| Regulatory Framework | Status/Era | Key Focus on AI Accountability |
| CPA 2019 / E-Commerce Rules 2020 | Operational | Addressing misleading ads and unfair trade practices. |
| DPDP Act 2023 / Rules 2025 | Notified 2025 | Notice, consent, and obligations of data fiduciaries. |
| AI (Ethics & Accountability) Bill | 2025 (Proposed) | Penalties up to ₹5 crore for algorithmic bias. |
| Kerala HC AI Policy | 2025 (Binding) | Prohibiting AI from making final judicial findings. |
- ‘Online Dispute Resolution (ODR)’ as a Public Utility
In the context of systemic delays in Indian courts, Online Dispute Resolution has moved from being a futuristic concept to a vital service that is necessary for the ‘legal health’ of the nation. ODR is the application of online technology in the avoidance, containment, and resolution of disputes. The policy plan of NITI Aayog is encapsulated in the document ‘Designing the Future of Dispute Resolution’.
Table 3: ODR and ADR Disposal Success Metrics (2022-2025)
| ODR Success Indicator | Statistic/Metric | Timeline |
| Pending cases in India | Over 40 million | 2025 |
| National Lok Adalat disposals | 23.5 crore cases | 2022-2025 |
| Single-day disposal record | 2.59 crore disputes | 4th NLA 2025 |
| Sama Platform resolution time | < 45 days | 2023 |
The effectiveness of ODR is particularly evident in the securities market. The SEBI ODR framework has been enhanced to offer a single portal where investors can file complaints and track status in real-time, allowing direct arbitration for specific categories of disputes.
- The Technological Stack of Modern ODR: AI and Blockchain
By 2026, the ODR landscape has shifted from simple digitized courtrooms to “agentic” systems that can take action, autonomous agents that can cluster thousands of case documents into storyboards in minutes. Modern platforms are leveraging advanced AI to perform tasks ranging from document clustering to sentiment analysis, which allows mediators to identify “cooling-off” periods when they detect high levels of anger.
One of the significant evolutionary changes is the incorporation of blockchain technology, which is used as a truth layer for evidence. There is now a “Evidence Lockers” feature in ODR platforms, where interactions and IoT data are timestamped on a blockchain ledger. This minimizes disputes over factual scenarios, where data on a ledger is treated as a fact.
- Access to Justice and the Constitutional Mandate
The overarching objective of ODR is the democratization of justice, which is enshrined in Article 39A of the Indian Constitution, that states that no citizen shall be denied justice because of economic or social disabilities. In ‘Amar Jain v. Union of India (2025),’ the Supreme Court held ‘that access to digital is part of the right to life under Article 21 of the Indian Constitution a landmark shift towards digital inclusion.’
The e-Lok Adalat model has proven to be a game-changer. By conducting proceedings through digital platforms, e-Lok Adalats eliminate the physical and economic barriers of travel and wage loss. In 2024-2025, the mass disposal of cases through National Lok Adalats underscored the effectiveness of these mechanisms.
- Future Outlook: Agentic AI and Transnational Standards
As we look toward the remainder of 2026 and beyond, ODR is set to handle over 80% of all consumer-to-business disputes globally. The rise of “Agentic AI” will see the transition from AI that writes text to AI that takes action autonomous agents that can cluster thousands of case documents into storyboards in minutes. However, this brings the question of whose rules do we follow to the forefront. The emergence of transnational digital standards, such as the APEC ODR Collaborative Framework, points toward a future where cross-border consumer disputes can be resolved through harmonized, borderless protocols.
In India, the transition will likely be characterized by the enactment of an arbitration-specific framework for AI and the establishment of a National ODR Council to accredit platforms and ensure ethical guardrails. The integration of ODR into the Bharat-Net infrastructure will be crucial for ensuring that the benefits of digital justice are not confined to urban elite but empower the “marginalized millions” who have historically been excluded from the judicial system.
- Conclusion
We are on the cusp of a paradigm shift in the delivery of justice. The interface of Artificial Intelligence and Consumer Law is no longer a hypothetical issue but a hard reality that has to be grasped for market stability. While there is a risk of information asymmetry and algorithmic bias, the interface of Artificial Intelligence and ODR is a potential solution to judicial congestion. By mandating algorithmic transparency, regulating dark patterns, and mainstreaming ODR as a primary mode of resolution, India is moving toward a responsive, and technology-integrated justice system. The 2024-2026 period will be remembered as the era when justice was finally untethered from physical locations and transformed into a pervasive, affordable, and equitable digital service.