The Central Consumer Protection Authority (CCPA), comprising Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra, has imposed a penalty of ₹5 lakh on Flipkart Internet Private Limited for facilitating the listing, advertising and sale of toys that did not comply with mandatory Bureau of Indian Standards (BIS) requirements under the Toys (Quality Control) Order, 2020

The proceedings arose from a suo motu inquiry initiated by the CCPA after it found that non-compliant toys, including products marked “Made in China” and toys lacking mandatory BIS certification, were being sold on the e-commerce platform. An investigation revealed that four sellers sold 1,338 such toys through Flipkart, generating seller revenue of approximately ₹54.56 lakh, while Flipkart earned about ₹14.28 lakh in fees from those transactions.

Flipkart contended that it functioned merely as an intermediary marketplace and that responsibility for BIS compliance rested with third-party sellers. The company argued that it neither manufactured nor sold the products and was protected by the intermediary safe-harbour provisions under the Information Technology Act.

Rejecting these submissions, the CCPA held that Flipkart's role extended beyond providing a neutral technological platform. The Authority observed that the platform actively facilitated the listing, hosting, advertising, promotion and sale of products and therefore had an obligation to exercise due diligence to prevent the sale of non-compliant goods. It found that despite knowledge of the violations, non-BIS compliant toys continued to remain listed and available for purchase on the platform.

The Authority further noted that labels such as “Flipkart Assured” could lead consumers to believe that the platform had verified the quality and safety of products. According to the CCPA, such representations created an assurance regarding product safety and quality and could mislead consumers when applied to products that did not meet mandatory standards.

The CCPA observed that the listing, advertising and facilitation of sale of non-compliant toys amounted to an unfair trade practice and misleading advertisement under the Consumer Protection Act, 2019. It held that consumers were deprived of material information regarding BIS certification and that the platform failed to adequately protect consumers from potentially hazardous products. The Authority also noted that Flipkart earned approximately ₹14.28 lakh in fees from the sale of the non-compliant toys.

Accordingly, apart from imposing a penalty of ₹5 lakh, the CCPA directed Flipkart to ensure that non-compliant BIS-standard toys are not listed, hosted, advertised, exhibited or offered for sale on its platform. The company was also directed to prominently display its contact details, email address and Grievance Officer details on the platform and submit a compliance report to the Authority within 15 days of the order.

Case No.: CCPA-2/11/2023-CCPA (Part-4)

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