Amazon Sues CCPA Over Penalty, Says Didn’t Violate Norms

Ecommerce major Amazon filed a case against the Central Consumer Protection Authority (CCPA) in the Delhi High Court. The lawsuit comes in response to an order from the authority that found the ecommerce platform in violation of the mandatory standards for the sale of pressure cookers and imposed a penalty.

The consumer watchdog had also slapped Flipkart with a penalty in August for the same matter.

CCPA, which comes under the Ministry of Consumer Affairs, Food and Public Distribution, imposed a penalty of INR 1 Lakh on Amazon for violating the Bureau of Indian Standards (BIS) standards for pressure cookers.

The case was brought before Justice Yashwant Varma last month.

According to the copy of the order, as reviewed by Inc42, Amazon claimed that it was not made aware of any investigations on behalf of CCPA. The ecommerce major added that it was also not given a chance to respond to the allegations.

Amazon argued that it did not get the investigation report on which CCPA based its penalty. The said report would have formed the bedrock of the action taken under Section 20 of the Consumer Protection Act (CPA), said Amazon’s counsels.

CCPA Can’t Impose Penalties: Amazon

Regarding Section 20, Amazon also stated that CCPA had no jurisdiction to impose penalties on the ecommerce giant.

The Indian arm of the US-based ecommerce giant added that it would have “stood protected and absolved from liabilities in light of the provisions made in Section 79 of the Information Technology Act, 2000.”

However, CCPA’s counsels refuted Amazon’s claims in court. CCPA said that the investigation was duly undertaken and it imposed the penalty in light of the evidence gathered in the said investigation.

Appearing for CCPA, Apoorv Kurup, Central Government Standing Counsel, said that Amazon did not place any supporting material on record to show that the sellers on its platform were offering BIS-compliant products.

Kurup added that Amazon can’t claim the safe harbour benefits in Section 79 of the Information Technology Act, 2000 if it can’t prove that it enforced the obligations under the CPA.

“The petitioner [Amazon] cannot claim a right to onboard sellers without enquiring that their products comply with the legal requirements as applicable,” argued CCPA’s counsel.

It is prudent to mention here that online marketplaces usually pass the responsibility of assuring the quality of a product to the sellers, on such platforms.

CCPA’s Arguments

However, CCPA stated that since Amazon admitted it earned a commission fee from the pressure cookers sold on its platform, it can’t dissociate itself from the issues arising from the sale of these products.

Justice Varma observed that prima facie, the CCPA investigation showed that the pressure cookers were not BIS-certified. He also noted that Amazon did not get an opportunity to refute or meet CCPA’s findings.

Justice Varma also told Amazon that it would have to inform the customers of the 2,265 non-BIS pressure cookers sold as per the CCPA order.

However, the court put the recall and reimbursement of those pressure cookers in abeyance till the next date. In the meanwhile, the ecommerce firm was ordered to submit INR 1 Lakh to the Registrar General of the Court within one week of the order on September 20.

The court added that certain issues warrant further consideration and listed the case to be heard next on November 14.