Why Consumer Forum imposed ₹25 lakh fine on Amazon

The Chandigarh State Consumer Disputes Redressal Commission recently ordered Amazon Reseller Services Private Limited and a Delhi-based company to pay damages worth ₹25 lakh for selling locally-manufactured socks under the name of international luxury brand Marc Jacobs..A bench of Justice Raj Shekhar Attri and Member Rajesh K Arya ordered Amazon to immediately stop displaying brand name ‘Marc Jacobs’ on the products manufactured by VK Knitting Industries, Delhi.It also requested the Central government to take appropriate action against Amazon for such wrong advertising. The Commission further awarded a compensation of ₹2 lakh to a customer for the mental agony and harassment caused to him by delivery of the wrong product..The Commission said that Amazon was “deliberately and fearlessly” engaged in “Dark Patterns” by displaying products of Marc Jacobs on its website and then delivering products of the local brand ‘Marc' for more than four years.Despite email communications for correction, Amazon continued to display ‘Marc Jacobs’ without any acceptable reason, it said. “By doing so, Amazon has earned undue enrichment and also opposite party no.2 [manufacturer] has been benefited therewith. The actual enrichment/collecting of money by their illegal means from gullible customers/purchasers cannot be properly determined as we have no data how much products have been sold by both the opposite parties, till date,” the Commission observed.It thus opined that an exemplary compensation must be awarded. It also held the manufacturer responsible for not stopping the sale of his goods despite it knowing that the products they were being sold under a different brand name..The observations were made in the decision on a complaint made by a Chandigarh resident Jatin Bansal (complainant) who had bought a pair of socks of ‘Marc Jacobs’ at a discounted price of ₹279.30 last year on Amazon.However, he was taken aback when he received the socks of ‘Marc’ instead and it showed the product was manufactured by VK Knitting Industries, Delhi.Though Bansal had attempted to return the product, there was no such option available. His request for refund was also not accepted, compelling him to approach the consumer court..Amazon failed to respond to the complaint within the stipulated period of 45 days and its defence was thus struck off. The manufacturer told the Commission that the error was made by Amazon and despite emails for correction, the e-commerce site had failed to do so.During the course of arguments, the Commission was shown Amazon’s website to prove that socks being manufactured by the Delhi-based company were still being sold under the brand name ‘Marc Jacobs’.Thus, the Commission found it well established that Amazon was engaging in such deception. It called the e-commerce giant’s action disheartening..On Amazon’s policy of no return for socks, the Commission noted that the company promises refund or replacement in event of a damaged, defective or different item delivery to the customer.Thus, it opined that Amazon was bound to refund full payment or replace the goods. It also found Amazon’s return policy to be in conflict with the Consumer Protection (E-Commerce) Rules, 2020 as per which no seller on an e-commerce platform can refuse to take back goods if those items are not of the characteristics or feathers as advertised. Since the return policy in the present case did not cover such goods, the Commission said it puts the complainant at disadvantage and thus is an unfair contract..Concluding that a different brand was delivered to the complainant by Amazon, the Commission said the company was bound to take it back. It accordingly allowed the complainant’s request for return of the item. Accepting the complaint, it directed a refund of ₹279.30 rupees received from the complainant for the purchase and a compensation of ₹2 lakh for the deficient services, harassment and adoption of unfair and restrictive trade practice.The complainant was also awarded a litigation cost of ₹20,000. It further ordered both Amazon and the manufacturer to deposit ₹25 lakh as damages in the legal aid account of the Commission. .Advocate Harshit Kakani represented the complainant.Advocate Atul Goyal represented Amazon.Advocates Archana and Mayank Aggarwal appeared for VK Knitting Industries. [Read Judgment]