After Amazon, Flipkart fined for allowing sale of poor quality cookers

The Central Consumer Protection Authority (CCPA) on Wednesday said it has imposed a penalty of Rs 1 lakh on e-commerce firm Flipkart for allowing sale of substandard domestic pressure cookers on its platform, in violation of mandatory standards.

Headed by Chief Commissioner Nidhi Khare, the CCPA has directed Flipkart to recall all such 598 pressure cookers sold on its platform, reimburse their buyers, and submit a compliance report within 45 days.

The central government routinely notifies the Quality Control Orders (QCOs), specifying compulsory conformity to a standard and use of the standard mark for a product to protect consumers from the risk of suffering injury and harm and in the interest of the public at large. The Domestic Pressure Cooker (Quality Control) Order, which came into force on February 1, 2021, mandates conformity to IS 2347:2017 for all domestic pressure cookers.

The CCPA observed that provisions in the ‘Flipkart Terms of Use’, such as mandatory use of the words ‘Powered by Flipkart’ on every invoice of the product and distinguishing sellers as Gold, Silver, and Bronze for distribution of various benefits, indicate the role played by Flipkart in sale of the pressure cookers on its e-commerce platform.

Flipkart admittedly earned a total fee of Rs 1,84,263 through the sale of such pressure cookers on its e-commerce platform. It was observed by the authority that when Flipkart had gained commercially from the sale of such pressure cookers, it could not alienate itself from the role and responsibility arising out of the sale to consumers.

An email query to Flipkart remained unanswered. This month, the CCPA also imposed a penalty of Rs 1 lakh on Amazon for selling pressure cookers that did not meet quality norms, and directed Amazon to notify the buyers of 2,265 such substandard pressure cookers sold via its platform about a product recall. It also directed Amazon to reimburse such customers.

The total fee earned by Amazon on the sale of such pressure cookers was Rs 6,14,825.41.

Regarding the penalty on Amazon, legal expert Avimukt Dar at law firm IndusLaw, earlier argued that the order was rather surprising in expecting Amazon to police and monitor seller activity in a manner that erodes platform immunity and potentially flouts FDI (foreign direct investment) norms. “While the argument of intermediary protection under the IT Act was recorded by the CCPA, it has not been addressed in the order. Moreover, the seller’s and the manufacturer's responsibility and liability for the defective products seem to have been ignored entirely. A challenge to this order seems quite likely,” Dar said.

To raise awareness and quality consciousness among consumers, the consumer protection body has launched a country-wide campaign to prevent sale of spurious and counterfeit goods that violate QCOs published by the central government. Daily use products identified as part of the campaign include helmets, domestic pressure cookers, and cooking gas cylinders.
 

The CCPA has written to district collectors across the country to investigate unfair trade practices and violations of consumer rights concerning the manufacture or sale of such products and submit action taken reports.

Under the campaign, BIS seized 1,435 pressure cookers and 1,088 helmets that do not conform to mandatory standards.

Last month, the Parliamentary Standing Committee on Commerce dismissed e-commerce players’ argument that they have no control over the items sold on their platform, putting the onus on them to act as an intermediary in the resolution of complaints about substandard and counterfeit products on their platform.

In the battle against counterfeit products, Anna Dalla Val, director of global brand relations at Amazon, said that she leads a global team dedicated to working with brands, industry associations, government regulators, and law enforcement to advance Amazon’s brand protection programme.

Val claimed the company prevented 4 billion bad listings from making it to the site last year. It also got rid of more than 3 million fake goods last year, against over 2 million in 2020.

“Amazon’s automated technology scanned more than 8 billion attempted changes to product detail pages daily for signs of potential abuse (compared to more than 5 billion in 2020),” Val said in an interview. “Amazon blocked more than 4 billion bad listings before they were listed in our store.”

The challenge is huge. The Organization for Economic Cooperation and Development (OECD) estimates that pirated and counterfeit products make up 2.5 per cent of world trade — that’s $464 billion a year.