New Delhi: The Central Consumer Protection Authority (CCPA) on Friday imposed a penalty of Rs 2,00,000 on Digital Age Retail Pvt Ltd (FirstCry) for false and misleading price representations.
The order, passed under Sections 10, 20, and 21 of the Consumer Protection Act, 2019, was issued for publishing misleading advertisements and engaging in unfair trade practices on its e-commerce platform (www.firstcry.com).
The matter arose from a consumer complaint alleging that FirstCry displayed products with the representation “MRP inclusive of all taxes,” while at the checkout stage, an additional GST was levied on the discounted price. According to a statement from the Ministry of Consumer Affairs, this created a misleading impression of higher discounts and confused consumers about the final payable amount.
The investigation, supported by data from the National Consumer Helpline (NCH), revealed that advertising discounts on the MRP but separately charging GST on the discounted price significantly reduced the benefit to consumers. For example, products advertised with a 27% discount were effectively sold at only an 18.2% discount after GST was applied.
Such practices were found to constitute deceptive pricing and misleading advertisements under Section 2(28), as well as unfair trade practices under Section 2(47) of the Consumer Protection Act, 2019.
It was further observed that disclaimers such as “additional charges may apply” or “GST and Additional charges may apply on discounted price” did not override the statutory requirement that the MRP must be inclusive of all taxes. By representing the price as tax-inclusive and then levying GST at checkout, the company engaged in “drip pricing,” identified as a dark pattern under the Guidelines for Prevention and Regulation of Dark Patterns, 2023. This practice misled consumers about the final payable amount and undermined informed decision-making.
The CCPA noted that this practice also contravened Rule 7(1)(e) of the Consumer Protection (E-Commerce) Rules, 2020, which mandates that the total price, inclusive of all charges and taxes, must be displayed upfront.
Consequently, the CCPA directed FirstCry to rectify this practice and ensure that both the original and discounted prices are shown inclusive of all taxes, with any additional charges clearly disclosed.
Following the CCPA’s intervention, the company has updated its platform to provide greater transparency in price display across its website and mobile application. Additionally, a prominent disclaimer stating ‘price inclusive of all taxes’ is now displayed on all pages of the company’s website and mobile app.
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https://www.freepressjournal.in/business/ccpa-slaps-2-lakh-fine-on-firstcry-for-misleading-ad-unfair-trade-practices