Using powers under Consumer Protection Act, 2019, the department of consumer affairs has ticked off e-commerce major, Amazon and edtech firm Byju’s for anti-consumer practices. While Amazon has been pulled up for its algorithms which prioritises its private labels and products of companies where it has investments, Byju’s has been asked to stop advertisements which furthers its business at the cost of misleading consumers.
Speaking at an industry seminar, Rohit Kumar Singh, secretary, department of consumer affairs, said, “We have told Amazon that your algorithms and the way you throw results at people have to be fair. You can’t have your own labels and companies in which you have invested appear on top of search results. This is not fair,” Singh said.
“The whole consumer protection paradigm is about fair trading practices. You might be the world’s largest company, but the balance between the seller and the consumer needs to be maintained. We gave them a piece of our mind,” Singh added.
On Byju’s, Singh said, “We had called all the edtech companies and said don’t put pressure on students. Don’t have Shah Rukh Khan telling a mom that two tutors are better than one tutor, get two for the price of one.” Singh added that the company agreed to the counsel before the government could proceed with hard steps.
Singh said that the government does not intend to impose regulations but would keep on taking actions against malpractices by the companies to protect the interest of consumers.
Under the Consumer Protection Act, 2019, the department of consumer affairs has powers to penalise companies for misleading ads and unfair trade practices. Under the Act, consumers have the right to seek redressal against unfair trade practices, restrictive trade practices and unscrupulous exploitation of consumers. Under the Act, a Central Consumer Protection Authority (CCPA) functions, which can act upon complaints by consumers as well as take up matters on its own.
According to the Act, the CCPA regulates matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public & consumers and promotes, protects and enforces the rights of consumers as a class
Singh’s warning to Amazon and Byju’s fall in the category of taking up matters on its own after having observed unfair practices and misleading advertisements.
The secretary also talked about a third area, which relates to data privacy. “How is it that when I search Google for a shoe, the next thing on my Facebook feed is a shoe advertisement? Who is responsible for that? I know it is good for the sellers, but as a consumer it is very painful and hurts my rights that information about me, my choices is being shared without my express consent,” he said. Analysts said that this aspect which will get checked once the Data Protection Bill becomes a law as under it, entities would require consumers’ consent for sharing data for any purpose other than for what it was collected.