Amazon Fined Rs. 12,000. Here’s everything you need to know

Last Updated at: Oct 27, 2020

If you make online purchases, then you must be very familiar with Amazon. It is one of the leading online stores that are gaining prominence with every passing day. However, Amazon has recently been involved in some legal proceedings. It was made to pay a substantial amount of fine for its pricing issues.

If you’re reading this, it’s very likely that you’re an existing or potential customer for tons of online websites selling everything under the sun from clothes and home furnishing to gadgets. Amazon, being one of the greatest giants of online selling in India, growing by leaps and bounds has often been embroiled in legal proceedings. But the recent case of it being fined is much to the delight of buyers. Read on, to know why Amazon was made to pay this rather small amount but with far-reaching consequences.

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Buying a branded laptop for just Rs.190, unbelievable, right?

The matter dates back to 2014, one of Amazon’s crazy offer days, when it showed an ASUS laptop with an MRP of Rs. 23,990 for Rs. 190. Unfortunately for Amazon, the order for this huge marked down laptop was being placed by a law student. A short while after making the payment, he received a confirmation for delivery on a specified date. However, sometime later, he received a call from the official customer care that the order had been canceled due to ‘pricing issues’. Several emails and calls on this issue by the complainant were not responded to and hence, he moved the District Consumer Forum Disputes Redressal Forum, Ganjam (Orissa) to seek compensation.

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Amazon’s defense that failed

Amazon pleaded that before a buyer pays for a product and accepts the contract, he mandatorily approved the ‘terms and conditions for sale’, (the tick box that we all unanimously fail to read) that specifies that Amazon bears no responsibility for the pricing defects, which entirely are shouldered by sellers on its platform.

While it may be fair to say that Amazon was only acting as an intermediary between the buyer and seller, the Court’s verdict clearly spells out that no e-commerce company in today’s digital world can choose to pass on its liability to meet obligations that it represents on its website.

If it really were an error on the seller’s behalf, Amazon should’ve had real-time internal processes in check to identify such unbelievably heavy discounting policies. The good thing about online contracts is the certainty, the proof available at any point of time and the increasingly pro-consumer attitude of the regulatory bodies that underscore the idea that large online shopping hubs with huge resources, access, and networking, cannot dictate their rules to the disadvantage of buyers.

The Court’s Verdict

The Consumer Forum ruled in favour of the complainant student, that Amazon is directed to pay Rs. 10,000 for mental agony and Rs. 2,000 for litigation expenses involved. Despite the mode of payment being cash on delivery, the complainant was very much a Consumer, considering the definition provided in the Consumer Protection Act and hence entitled to damages.

Specific Performance of Contract: What does it mean?

However, it is important to note that the Consumer forum rejected the complainant’s plea of specific performance of a contract – that is, delivery of the promised laptop in this case. A binding contract comes into force when we accept the offer. So, here as soon as the buyer agreed to choose a payment mode (cash on delivery, in this case), an order is made and hence, the contract is concluded. Now, since a legally binding relationship has come into being, the contract made cannot be unilaterally canceled by any party without any default on part of the other. This gives rise to several remedies, specific performance being one of them, where one can claim that the good/service promised may be enforced.

Setting the right example going forward

With Big Billion Days and Pre-Diwali sales at almost every major shopping website, this order comes just in time and seeks to hold out a huge learning example for all the players on the internet, that they may be held responsible for the attractive pricing tactics they adapt to their advantage.

The number of fines levied on Amazon under the Consumer Protection Act was small but had a great influence on its reputation. Thus, being a buyer you need to be aware when buying any product especially when online sites offer sale. The consequence faced by Amazon is great learning for both the owner and the buyers.

Avani Mishra is a graduate in law from the National Law Institute University, Bhopal. She qualified the Company Secretary course with an All India Rank 1 and is a recipient of the President’s Gold Medal for her academic distinctions. She also holds a B.Com degree with a specialization in Corporate Affairs and Administration.