SUMMARY
This is the fifth time in 2022 that the CCPA has imposed a penalty on an ecommerce platform or seller for selling substandard pressure cookers
The CCPA directed Cloudtail to recall all the 1,033 pressure cookers sold, issue refunds to the customers and submit a compliance report in 45 days
Following allegations of Amazon giving preferential treatment to Cloudtail, the US ecommerce giant said it would shut Cloudtail in May 2022
In the fifth case of its kind, the Central Consumer Protection Authority (CCPA) has imposed a penalty of INR 1 Lakh on the now-defunct etailer Cloudtail for selling substandard pressure cookers. The consumer watchdog has also directed the erstwhile largest seller on Amazon to recall all the substandard pressure cookers.
According to the CCPA, Cloudtail sold pressure cookers that did not meet the standards set by the Bureau of Indian Standards (BIS) under the Domestic Pressure Cooker (Quality Control) Order (QCO), 2020.
Cloudtail told the CCPA that it stopped importing pressure cookers after the QCO came into force. However, the consumer watchdog noted that even though the Amazon seller stopped the imports, it did not stop selling the substandard units. Cloudtail sold 1,033 pressure cookers after the QCO came into force.
As part of the penalty, the CCPA directed Cloudtail to recall all the 1,033 pressure cookers sold and issue refunds to the customers. The Amazon seller has also been given a time of 45 days to submit a compliance report.
Interestingly, the sales figures were mentioned in the previous orders of CCPA. For instance, it was discovered that Amazon made north of INR 6 Lakh selling substandard pressure cookers, for which it was fined.
“Violation of standards mandated by the QCOs not only endangers public safety but can make consumers vulnerable to severe injuries including loss of life,” the CCPA said in its order. The consumer watchdog added that the issue related to substandard pressure cookers is especially important since it is present in most homes, close to the family.
Earlier this year, the consumer watchdog also fined Amazon and Flipkart for the same issue, ordering them to recall all the units. The CCPA also issued notices to Paytm Mall, Shopclues and Snapdeal. Paytm Mall and Snapdeal were subsequently fined.
Amazon was fined for selling 2,265 substandard pressure cookers, while the number was 598 for Flipkart. For Paytm Mall and Snapdeal, the number stood at 39 and 73, respectively.
The total number of substandard pressure cookers sold after the CCPA enforced the QCO for pressure cookers has reached 4,008, including Cloudtail. Even though the numbers vary significantly, each of the platforms was slapped with a penalty of INR 1 Lakh.
However, Amazon took the CCPA to the Delhi High Court over the penalty and the recall order. In its petition, the ecommerce platform claimed that it was neither made aware of any investigations nor given a chance to respond. The matter is scheduled to be heard on November 14.
Cloudtail was operated by Prione Business Services Ltd, a joint venture between Amazon and Infosys cofounder N.R. Narayana Murthy’s Catamaran Ventures. However, following allegations on the American ecommerce giant of giving preferential treatment to sellers Cloudtail and Appario Retail, Amazon said that Cloudtail would shut its seller services from May 2022.
Appario Retail operates under the aegis of Frontizo Business Services, a joint venture between Amazon and the Patni Group. Earlier this year, the Competition Commission of India (CCI) also conducted raids on the two subsidiaries of Amazon.
Earlier this week, Amazon also announced its plans to shut Appario Retail in 12 months.
