New Delhi: The Central Consumer Protection Authority (CCPA) on Friday said it has imposed a penalty of Rs 2,00,000 on Digital Age Retail Pvt Ltd (FirstCry) for false and misleading price representations.
Passed under Sections 10, 20 and 21 of the Consumer Protection Act, 2019, the order 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 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.
This created a misleading impression of higher discounts and misled consumers about the final payable amount, according to a statement from the Ministry of Consumer Affairs.
The investigation supported by data from the National Consumer Helpline (NCH), showed that the practice of 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 per cent discount were effectively sold at only an 18.2 per cent discount after GST was applied.
Such representations were found to amount to deceptive pricing, misleading advertisements under Section 2(28), and unfair trade practices under Section 2(47) of the Consumer Protection Act, 2019.
It was 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,” a dark pattern under the Guidelines for Prevention and Regulation of Dark Patterns, 2023, which misled consumers about the final payable amount and undermined informed decision-making.
“Such practice also contravened Rule 7(1)(e) of the Consumer Protection (E-Commerce) Rules, 2020, which requires the total price, inclusive of all charges and taxes, to be displayed upfront,” according to the CCPA.
The CCPA, therefore, directed the company to rectify this practice and ensure that both original and discounted prices are shown as inclusive of all taxes, with any additional charges clearly disclosed.
Following CCPA’s intervention, the company has rectified its platform to provide more transparency in the display of prices across the company’s website and mobile application.
Also, a prominent display of the disclaimer ‘price inclusive of all taxes’ is put across all pages of the Website and mobile application of the Company.
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