Online shopping

Billed on MRP? You might have a cure

A consumer dispute resolution commission in Telangana recently held Flipkart Internet Pvt. responsible for charging a customer more than the maximum selling price. The e-commerce major, as well as the seller, were asked to pay compensation of Rs 50,000 plus costs.

The consumer had purchased Freedom Refined Sunflower Oil on Flipkart. and was charged above the MRP of Rs 140. The original MRP of the product was smudged and unreadable, the basis on which the aggrieved consumer filed the complaint.

Flipkart argued that it was a mere middleman in the transaction and that the sale was undertaken by an independent seller. There is no contract between Flipkart and the buyer, and the transaction was between the seller and the buyer. The responsibility of an e-commerce platform stops at displaying the required information; ensuring its accuracy is the seller’s duty, the e-commerce platform argued.

According to Flipkart, it was never in possession of the merchandise and cannot be held responsible for tampering with the product. Moreover, he says, the seller is the ultimate beneficiary of the excess amount.

The Consumer Affairs Committee did not buy these arguments.

He said that under the rules of legal metrology (packaged goods), e-commerce platforms are likely to provide information such as MRP on their website. They have a responsibility not to manipulate the goods or take unreasonable profit from them. Failure to comply with these stipulations constitutes a breach of service under consumer protection law.

Deficiency refers to any imperfection or inadequacy of the product or service and includes any negligence which causes loss or injury to the consumer.

Economic loss and mental agony being the harm in this case, said Rajesh Vellakkat, partner at Fox Mandal, Solicitors and Advocates. “Flipkart was rightly penalized.”

An intermediary’s limited liability under the Information Technology Act 2000 cannot be extended to consumer protection laws, where the user makes purchases based on the credibility of the commerce site electronics rather than the seller himself, Vellakkat added.

The court also pointed to e-commerce rules to say that they prohibit platforms from charging excessive prices unless justified. What a justified price is would depend on the circumstances in which the service is provided, he said.

A contract is abusive when there is a significant change in the rights of the consumer as in this case. A price increase of Rs 140 was deemed excessive by the court.

A straitjacket approach is undesirable in any case, said Ashwini Vittalachar, partner at Samvad Partners.

Mis-selling is common among physical sellers as well as online sellers in marketplaces. In an online marketplace, an intermediary’s liability should depend on the extent of that marketplace’s involvement in mis-selling, Vittalachar stressed. “In one case, there could be an outright violation of labeling regulations or other requirements stipulated by law. In yet another scenario, the market may have no role to play beyond provide access to the seller.”

E-commerce rules are relatively new compared to retail, both off-line and off-line. The future of e-commerce-consumer disputes will depend on how various consumer redress forums approach the extent of intermediaries’ liability, she said.