Prop Adam Jones had already left the field with a torn calf and captain Sam Warburton had received a red card for a dangerous tackle, so an injury to another prop would result in uncontested scrums where neither team is permitted to push.
"We'd already lost Adam Jones, and we discussed in the box whether we would fake an injury to one of our props and go to uncontested scrums," Gatland revealed.
"But morally, I made the decision it wasn't the right thing to do.
"We could easily have done that in the first 25-30 minutes, but in the spirit of the game, in the spirit of a World Cup semi-final, I didn't think that was the fairest or the right thing."
Gatland's revelation came after he discussed the issue of Warburton's dismissal.
"I know a lot has been spoken about the red card," he said.
"In retrospect, I can understand in any game under the letter of the law there are a number of decisions referees can make.
"I just thought on that occasion, given the significance of a World Cup semi-final, to give a yellow card would have been an appropriate decision."
The International Rugby Board have yet to react to Gatland's revelations.