Flipkart Moves Karnataka High Court Against CCPA Penalty For Selling Non-BIS Compliant Toys

The Karnataka High Court on Thursday sharply pulled up e-commerce giant Flipkart for selling toys that did not conform to Bureau of Indian Standards (BIS) norms, after the company challenged a Rs 5 lakh penalty imposed on it by the Central Consumer Protection Authority (CCPA).

Justice Suraj Govindaraj, hearing Flipkart's plea against the CCPA's August 19 order, said the company owed its customers a basic duty of verification before listing products for sale on its platform. "Everybody goes on the website believing that you have done due diligence and you have verified who the seller is and the trust gets built on it. These are toys which children will use, and infants will put in their mouths. If your plastic is not that good, the impact is huge," the judge observed.

Senior advocate Vikram Huilgol, appearing for Flipkart, told the court that the CCPA's order did not accuse the company of any overt false representation, and that the challenge was confined to the quantum of the penalty. "The entire case is that toys sold on the platform did not have all the disclaimers. It does not amount to unfair trade practice. At most, it would be a violation of provisions under the BIS Act," he submitted.

The judge, however, was unimpressed by the attempt to minimise the lapse. "The penalty amount of Rs 5 lakh is a small amount for the company. You have made a mistake by selling toys. Everybody makes a mistake. Admit the mistake and go ahead with life," Justice Govindaraj said, adding that it was ultimately the consumer who ended up being duped. "You are not selling the toys free of cost on your platform," he remarked, adding that verifying seller credentials should be part of the company's corporate social responsibility.

Flipkart's counsel informed the court that the company would pay the fine while the case remained pending. The CCPA's order had directed Flipkart to ensure that toys not compliant with BIS standards are not listed, hosted, advertised, exhibited, or offered for sale on its platform unless they fully comply with applicable laws and mandatory disclosure norms. The authority had also directed the company to prominently display its customer care number, email address, and grievance officer's details on the platform for consumers to reach out to.

While issuing notice to Flipkart in the matter, the High Court directed the company to file an affidavit setting out in detail how it intends to comply with the CCPA's directions concerning the sale of toys on its platform.

The dispute traces back to 2023, when the CCPA took suo motu cognisance of complaints regarding the sale of substandard toys on Flipkart's website. In its order, the authority had noted that the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, framed under the Information Technology Act, 2000, lay down clear duties and obligations for intermediaries operating online marketplaces.

The CCPA had further held that Flipkart could not claim to be a mere neutral intermediary, since it actively used algorithms to tag products as "Flipkart Assured," "best seller," and "trending," effectively influencing consumer choice rather than simply hosting third-party listings. This, the authority reasoned, brought greater responsibility on the platform to ensure that such curated products actually complied with safety norms, particularly where children were concerned.