Daijiworld Media Network - New Delhi
New Delhi, Sep 27: The Central Consumer Protection Authority (CCPA) has imposed penalties of ?10 lakh each on Amazon and Flipkart and Rs 5 lakh on JioMart for selling and advertising an unregistered agro-chemical product, 'Cyclosinone Herbicide', on their platforms.
In a separate order dated September 22, the consumer protection regulator directed the three e-commerce companies to immediately stop the sale and advertisement of the product, which it found was being marketed without disclosing the chemical name of its active ingredient or its composition.
The CCPA also directed the platforms to conduct a self-audit to prevent the listing of products that violate existing laws or pose a potential risk to consumer safety. The companies have been asked to submit compliance reports within 15 days of the order.
The investigation began after the CCPA received a complaint forwarded by the Union Ministry of Agriculture. The complaint had originally been filed by the Crop Care Federation of India (CCFI).
During the investigation, the Agriculture Ministry informed the CCPA that no chemical named "Cyclosinone" was listed in the Schedule to the Insecticides Act, 1968. The regulator said this meant the product had been marketed and sold without undergoing the mandatory safety, bio-efficacy, quality and legal checks required under the law.
The CCPA observed that the e-commerce marketplaces had failed to carry out adequate independent verification of the product's regulatory status before allowing its listings to go live.
In its order against Amazon, the regulator cited 38,410 orders involving 43,634 units, with an aggregate sale value of Rs 96,42,572, highlighting the extent of consumer exposure and what it described as the misleading impression created among buyers.
The CCPA rejected the platforms' defence that responsibility for regulatory compliance rested contractually with individual sellers. It held that private arrangements between marketplaces and sellers cannot override statutory obligations imposed by Parliament or delegated legislation intended to protect consumers.
The regulator said the requirement for marketplaces to obtain seller undertakings itself demonstrated that e-commerce entities have a compliance responsibility and cannot simply rely on contractual terms with sellers.
The CCPA also invoked Rule 4(3) of the E-Commerce Rules, which prohibits e-commerce entities from adopting unfair trade practices in the course of business.
"Sellers may submit false or incomplete declarations in order to list their products. Therefore, relying only on self-declaration is inadequate," the CCPA observed, adding that such reliance reflected deficiencies in seller onboarding procedures, product verification and content moderation mechanisms.
The regulator clarified that it was not exercising jurisdiction over the manufacture, composition or scientific properties of the product, as those matters fall within the jurisdiction of other authorities.
The CCPA said its order was limited to examining the conduct of the e-commerce companies in relation to consumer rights violations, misleading advertisements and unfair trade practices, which fall within its statutory mandate.
The regulator's action comes amid growing scrutiny of online marketplaces over the verification of products listed on their platforms and the measures adopted to prevent the sale of products that do not comply with statutory safety and regulatory requirements.