Amazon seller Cloudtail loses appeal in pressure cooker case

The National Consumer Disputes Redressal Commission (NCDRC) on August 23 dismissed an appeal filed by Amazon seller Cloudtail in the pressure cooker case.

India’s Central Consumer Protection Authority (CCPA) in November 2022 passed an order against Cloudtail for selling domestic pressure cookers on Amazon in violation of mandatory standards prescribed by the Bureau of Indian Standards (BIS). CCPA had directed Cloudtail to recall 1,033 units of pressure cookers, refund the buyers, and pay a penalty of Rs 1 lakh. Cloudtail had appealed this order with the NCDRC.

The pressure cooker that was in violation of the norms was Amazon’s private label Amazon Basics’ 4L pressure cooker.

Cloudtail can approach the Supreme Court if it’s not satisfied with the NCDRC decision.

Why does this matter: When it comes to e-commerce, liability for faulty or uncertified products is still murky. Are the marketplaces (like Amazon and Flipkart) that show these products responsible or the sellers (like Cloudtail) or the manufacturers (AmazonBasics in this case)?

In the pressure cooker case, CCPA went after multiple e-commerce platforms including Amazon, Flipkart, and Paytm Mall. While Flipkart and Paytm paid the fines, Amazon challenged the CCPA in the Delhi High Court arguing that it is not liable as it is an intermediary and should not be held liable for products sold by third-party sellers on the platform. CCPA, however, disagreed with this, claiming that Amazon failed to perform due diligence. While the case is still pending a final decision, CCPA decided to go after the seller of the pressure cookers, Cloudtail, as well.

Article continues below ⬇, you might also want to read:

• India’s Consumer Protection Agency Imposes Penalties On Cloudtail For Selling Faulty Pressure Cookers On Amazon
• India’s CCPA Questions Amazon’s Role As Intermediary, Blames It For Sale Of Faulty Cookers In Delhi HC
• Amazon Moves Delhi HC Against CCPA’s Penalty For Selling Low-Quality Pressure Cookers
• Amazon To End Partnership In Cloudtail, The Largest Seller On The Platform And Prime Suspect Of Accusations Levied Against The E-Commerce Platform

Despite the dismissal of Cloudtail’s appeal by NCDRC (which might suggest that Cloudtail bears responsibility in this case), it is still not clear if and how much liability should be pinned on Amazon as the manufacturer of the product as well as the marketplace that was displaying the product. We can expect more clarity on this in subsequent hearings of the case pending at Delhi HC.

Why was Cloudtail’s appeal dismissed: “Cloudtail had submitted in its reply to CCPA that after the QCO (Quality Control Order) came into force, it had suspended the import of the pressure cookers. It was observed by CCPA that though import was suspended, the company had not stopped the sale of such pressure cookers to consumers. In fact, this submission evidently indicated that despite being aware of the QCO, the company was still selling such pressure cookers to consumers at large,” NCDRC noted, reiterating the stance of CCPA. The copy of the dismissal order is not yet uploaded to NCDRC’s website.

“Domestic pressure cookers are among the most commonly used everyday items in households, and are present in the immediate vicinity of family members. Therefore, a domestic pressure cooker, which violates the mandatory requirements of the QCO can prove to be extremely fatal and dangerous for the life and safety of consumers and public at large.” — National Consumer Disputes Redressal Commission (NCDRC)

Amazon and Cloudtail relationship: Notably, Amazon had a significant stake in Cloudtail and Cloudtail was the largest seller on Amazon until May 2022, when Cloudtail and Amazon ended their relationship. Cloudtail was at the centre of many accusations levied against Amazon with retailer bodies complaining that the seller made the bulk of the sales on the platform and that it received preferential treatment from Amazon.