The Central Consumer Protection Authority (CCPA) has has held Flipkart Internet Private Limited liable for unfair trade practice and misleading advertisement under the Consumer Protection Act, 2019, for facilitating the sale of toys lacking mandatory BIS certification on its marketplace. The Authority rejected Flipkart’s intermediary safe-harbour defence, observing that the platform continued to host non-compliant listings even after receiving actual knowledge, and that algorithmic tags like “Flipkart Assured” took the platform beyond the role of a neutral host.
The CCPA clarified that the regulatory obligations under consumer law must be determined by the functional role and consumer impact of the platform, and cannot be avoided by platform design choices or self-characterisation as an intermediary. The safe-harbour under Section 79 of the IT Act is not an absolute defence; it stands withdrawn where the intermediary, upon receiving actual knowledge, fails to act expeditiously to remove unlawful content.
Further, where a marketplace platform uses algorithmic endorsements that convey assurances of product safety and quality, it steps out of the neutral host role and assumes the character of a participant making affirmative claims, attracting liability for false guarantee and misleading advertisement under the Consumer Protection Act, 2019, added the Court, while asserting that the duty of due diligence under the IT Act, the IT Rules, and the E-Commerce Rules cannot be contractually delegated to sellers, and the earning of platform fees from non-compliant transactions creates a direct nexus between the platform and the underlying product violation.
The Coram consisting of Nidhi Khare (Chief Commissioner) and Anupam Mishra (Commissioner) observed that despite the enforcement of the QCO, 2020, Flipkart continued to list and facilitate the sale of toys marked “Made in China” or otherwise lacking mandatory BIS certification, directly violating the statutory standards, and that the platform hosted sellers with inaccurate or unverifiable addresses, thereby hindering regulatory oversight and accountability.
The Authority noted that Flipkart’s commercial benefit of Rs. 1.42 lakhs from the sale of non-compliant toys raised serious concerns under Section 2(47) of the Act, 2019 pertaining to unfair trade practices. The Authority further observed that Flipkart’s attempt to shift responsibility solely to third-party sellers contradicted the consumer-centric obligations under the Act, 2019 and the E-Commerce Rules, 2020, and that by enabling the sale of toys without the BIS mark, Flipkart had potentially misled consumers into purchasing products not conforming to prescribed safety standards, thereby violating the right to be protected against hazardous goods and the right to be informed under Section 2(9) of the Act.
The CCPA found no merit in Flipkart’s intermediary argument, observing that even after receiving actual knowledge of the hosting, listing, and advertising of non-compliant BIS standard toys on its platform, Flipkart had failed to expeditiously remove or disable access to such toys, reflecting a gap in due diligence and indicating a failure to ensure compliance with prescribed safety standards.
The Authority further noted that the “Flipkart Assured”, “Best Seller”, “Trending”, and “AD” algorithmic tags took Flipkart beyond the role of a neutral host, and that the “Flipkart Assured” tag misled consumers into believing the platform had verified the product’s safety and quality, thereby giving a false guarantee. The CCPA also observed that the concealment of material information such as BIS certifications and the ISI mark directly violated the consumer’s right to be informed about the quality and standard of goods and the right to be protected against hazardous goods.
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Briefly, a preliminary inquiry under Sections 18(2) and 19 of the Consumer Protection Act, 2019 established that Flipkart failed to exercise requisite due diligence to ensure that only QCO-compliant toys were sold on its platform. Accordingly, a notice dated 10 January 2023 was issued to Flipkart, calling upon it to explain the alleged violations of the Consumer Protection Act, 2019, the Consumer Protection (E-Commerce) Rules, 2020, and the QCO, 2020.
In its response dated 30 January 2023, Flipkart claimed the protection of an “intermediary” under Section 2(1)(w) read with Section 79(1) of the Information Technology Act, 2000, asserting that it merely provides a technology platform facilitating transactions between third-party buyers and sellers, and that it neither manufactures, imports, distributes, nor sells any product. Flipkart further contended that Section 17 of the BIS Act, 2016 casts obligations strictly on manufacturers, importers, distributors, or sellers, and not on a technology platform; that the statutory framework under Rule 5 of the E-Commerce Rules distinguishes between a marketplace entity and a marketplace seller, placing the duty to avoid unfair trade practices on the seller under Rule 6(1); and that it had already taken down the impugned listings and issued formal communications to the concerned sellers on 19 January 2023.
Upon being directed to furnish seller details, Flipkart disclosed four sellers — Happy Zone2 (Ghaziabad, UP), All Good Quality (Ghaziabad, UP), SmileMakers/Latika Enterprises (New Delhi), and Optim VRcommerce (Mohali), and subsequently, on 05 December 2023, submitted that 1,338 non-compliant toys had been sold through these sellers, generating seller revenue of Rs. 5.45 lakhs and Flipkart fees of Rs. 1.42 lakhs. Individual actions were then initiated against the four sellers.
The CCPA, finding a prima facie case of unfair trade practice impacting consumers as a class, directed the Director General (Investigation) on 03 June 2025 to conduct a detailed investigation. The Investigation Report dated 19 December 2025 revealed that Flipkart continued to list toys lacking BIS certification on its platform as of December 2025; that several listings displayed “country of origin: China” despite no Chinese toy manufacturer having been granted a BIS licence; that Flipkart was not conducting any independent verification of BIS compliance and was relying solely on seller self-declarations; that Flipkart had earned Rs. 1.42 lakhs from the impugned listings; that the email address of the Grievance Officer was buried within the lengthy Terms of Use rather than being displayed in the dedicated Grievance Redressal section; that the platform lacked clear pre-purchase disclosure of its limited role as a neutral intermediary; and that Flipkart had failed to communicate with all specific sellers identified in the show cause notice.
