Consumers Beware: No excuse for selling unsafe goods

A wide variety of defective household goods, valued at Rs 76 lakh, unearthed from the godowns of e-commerce giants like Amazon and Flipkart by the Bureau of Indian Standards (BIS) exposes the extent of sale of such goods on online platforms.

To protect consumers from the harm caused by unsafe goods, the government has brought as many as 769 products under quality control orders, mandating compulsory certification and validation of their safety and performance by the BIS. As part of its surveillance operations, the BIS, which has to enforce these orders, conducted ‘search and seizure’ operations in a number of godowns of e-commerce companies in Delhi, Gurugram, Faridabad, Lucknow, Hyderabad and Tiruvallur in Tamil Nadu. It found nearly two dozen items — ranging from gas stoves, electric water heaters, room heaters, food mixers, hand blenders, ceiling fans and PVC cables to toys, baby diapers, pressure cookers, stainless steel bottles and aluminium foils — without the compulsory ISI mark or with fake ISI marks.

This is a matter of great concern because these goods, particularly toys, pressure cookers, PVC cables and electrical appliances, could and have caused grievous injuries and even death, besides fires, if not made to prescribed safety standards. Under the Consumer Protection Act, goods without the mandatory ISI mark are classified as ‘defective’. Their sale violates not only the quality control orders, bringing them under mandatory certification, but also provisions of the Consumer Protection Act and the Consumer Protection (E-Commerce) Rules, besides the Bureau of Indian Standards Act.

Under the BIS Act, goods that are under mandatory ISI certification cannot be manufactured, imported, distributed, sold, stored or exhibited for sale, except under a valid licence and a standard mark. BIS can search for and confiscate goods that violate this provision (Section 17) in the law. Such an infringement invites imprisonment of up to two years or a fine of not less than Rs 2 lakh, which may extend to 10 times the value of the goods sold or offered for sale.

Given the safety implications of sale of such goods, consumer protection demands that the products sold without the ISI mark be recalled immediately and purchasers compensated. However, the BIS Act gives the Bureau these powers only in cases where the products bearing the ISI mark fail to conform to standards. In cases where goods are being sold without the mandatory ISI mark, the Bureau cannot take such action. This is a major flaw in the law and needs to be rectified.

The Central Consumer Protection Authority (CCPA), constituted under the CP Act of 2019, is, however, equipped to take such action to protect consumers from violations of their rights.

In 2022, the CCPA Bench, comprising Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra, slapped a fine of Rs 1 lakh on each of the five e-commerce companies found selling non-ISI marked pressure cookers and directed them to recall all pressure cookers sold from the day the mandatory standard came into effect — February 1, 2021 — and reimburse the cost to consumers.

Unfortunately, barring Paytm Mall, all others — Amazon, Flipkart, Shopclues and Snapdeal — challenged this before the Delhi High Court, which has kept the ‘Recall and Reimburse’ order in abeyance through an interim order. While the e-commerce entities questioned the jurisdiction of the CCPA and also argued that they were not sellers or manufacturers, and only intermediaries, and were exempt from any liability under Section 79 (1) of the Information Technology Act, the CCPA contended that e-commerce companies cannot claim a right to onboard sellers without ensuring their compliance with applicable laws, rules and regulations. Besides, Amazon cannot claim exemption from liability under the IT Act without establishing that they had discharged their obligations under the CP (E-Commerce) Rules, the CCPA argued.

Interestingly, this month, in a US court, Amazon challenged the liability fastened on it by the Consumer Product Safety Commission (CPSC) for the sale of four lakh hazardous products — faulty carbon monoxide detectors, hair dryers without electrocution protection and children’s sleepwear that violated flammability standards — sold by third party sellers using the ‘Fulfilled by Amazon’ programme. Holding that the platform fitted the definition of ‘distributor’ under the Consumer Product Safety Act, the CPSC had directed it to recall the unsafe products and refund the cost to consumers.

As consumer protection authorities around the world grappled (and continue to grapple) with the issue of liability of e-commerce platforms in respect of sub-standard and fake goods sold through their portals, the Organisation for Economic Cooperation and Development (OECD), an intergovernmental organisation committed to democracy and market economy, in July 2022 released a Policy Guidance on a ‘Consumer Product Safety Pledge’. Its aim was to get online marketplaces to voluntarily commit to actions that go beyond their existing legal obligations, in order to protect consumers from unsafe products. Several countries have subsequently formulated such pledges, including India.

The voluntary pledge formulated by a committee of all stakeholders constituted by the Union Ministry of Consumer Affairs requires signatories to ensure that all products listed for sale on their platforms comply with relevant laws, rules and regulations, including quality control orders. However, only 13 e-commerce entities — five of Reliance Retail group, four of Tata Sons group, Zomato, Ola, Swiggy and Blinkit — have taken the pledge.

The BIS raids and seizure of non-ISI marked goods from Amazon and Flipkart godowns have undermined consumer confidence and trust and it is essential for these platforms to do whatever it takes to ensure that unsafe, defective and fake goods are not sold on their marketplace. They also need to voluntarily recall unsafe and defective goods sold on their portals and offer refunds and show that they care for consumers.

The government, in turn, needs to look at all applicable laws in the context of consumer safety and bring about the necessary amendments to hold e-commerce platforms accountable for the sale of unsafe goods.

— The writer is a consumer rights and safety expert

Features