The Central Consumer Protection Authority (CCPA) has imposed a penalty of ₹10 lakh on Dial4Trade Technologies for facilitating the online listing, hosting, advertising and sale of Ammonium Nitrate on its e-commerce platform without the mandatory regulatory safeguards required under law. The Authority said it is also in the process of examining other e-commerce platforms for unauthorised online sale of hazardous chemicals and explosive substances.
It has directed Dial4Trade Technologies to immediately discontinue the listing, hosting, advertising or facilitation of sale of Ammonium Nitrate, or any other substance classified as an explosive under the Explosives Act, 1884, on its platform.
The final order was passed by the CCPA, headed by Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra, under Sections 10, 20 and 21 of the Consumer Protection Act, 2019.
The Authority said this action is part of the CCPA’s ongoing examination of e-commerce platforms for unauthorised sales of hazardous chemicals including Ammonium Nitrate, Gun Powder, Picric Acid and Pentaerythritol Tetranitrate (PETN). It added that the matter is currently under examination in respect of other platforms including IndiaMART, Justdial, Sigma-Aldrich India, Exporters India, Ibuychemikals, Alpha Chemika and TradeIndia.
“During examination of the Dial4Trade platform, the CCPA found that Ammonium Nitrate was listed and made available for purchase without adequate safeguards, including disclosure of valid PESO (Petroleum and Explosives Safety Organisation) licence details of the seller, verification of the identity and licensed status of the buyer before purchase, mechanisms to ensure traceability of transactions among others, ” CCPA noted in its statement.
CCPA held that presenting a “regulated explosive substance for sale in the manner of an ordinary consumer product”, without informing users that its lawful purchase requires the prescribed licence, constitutes a misleading advertisement and unfair trade practice. Dial4Trade contended that it operates as a Business-to-Business (B2B) marketplace intermediary and should not be held responsible for listings uploaded by third-party sellers. “ The CCPA rejected the contention, noting that the platform permitted purchase of the substance in quantities as low as a single unit and did not have minimum order quantity or institutional-buyer verification mechanisms ordinarily associated with a B2B model,” the official statement noted. Also the Authority held that the Consumer Protection (E-Commerce) Rules, 2020 apply to marketplace e-commerce entities, irrespective of how the platform describes its business models.
“The CCPA also examined Dial4Trade’s reliance on the intermediary safe-harbour protection under Section 79 of the Information Technology Act, 2000. The Authority observed that such protection is subject to compliance with prescribed due-diligence requirements. It found that a compliance mechanism based only on reactive removal of listings after detection, rather than verification at the point of listing, was insufficient in the case of regulated and hazardous substances,” it added.