CCPA slaps Rs 2 lakh fine on FirstCry for misleading ads, unfair trade practices

New Delhi: The Central Consumer Protection Authority (CCPA) has imposed a fine of Rs 2 lakh on Digital Age Retail Pvt Ltd (FirstCry) for misleading advertisements and unfair trade practices.

According to an official statement on Friday, the CCPA has "imposed a penalty of Rs 2,00,000 on Digital Age Retail Pvt Ltd (FirstCry) for false and misleading price representations." The order has been passed under Sections 10, 20 and 21 of the Consumer Protection Act, 2019, it added.

The CCPA has issued an order against Digital Age Retail (FirstCry) for publishing misleading advertisements and engaging in unfair trade practices on its e-commerce platform (www.firstcry.com).

The authority 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.

The action was taken on the basis of 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, the statement said.

"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," it added.

The CCPA found such practices as 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 Add'l charges may apply on discounted price" did not override the statutory requirement that the MRP must be inclusive of all taxes," the statement said.

By representing the price as tax-inclusive and then levying GST at checkout, the CCPA pointed out that the company engaged in 'drip pricing', which is a dark pattern under the Guidelines for Prevention and Regulation of Dark Patterns, 2023.

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, the statement said.