New Delhi: The Central Consumer Protection Authority (CCPA) has imposed a ₹10 lakh penalty on Dial4Trade Technologies Private Limited 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 final order against Dial4Trade 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 CCPA has also directed Dial4Trade to immediately discontinue the listing, hosting, advertising or facilitation of the sale of Ammonium Nitrate, or any other substance classified as an explosive under the Explosives Act, 1884, on its platform.
CCPA Finds Missing Safeguards on Dial4Trade Platform
During its examination of the Dial4Trade platform, the CCPA found that Ammonium Nitrate had been listed and made available for purchase without adequate regulatory safeguards.
According to the CCPA, the listing did not provide or implement several mandatory measures, including disclosure of valid Petroleum and Explosives Safety Organisation (PESO) licence details of the seller.
The Authority also found that Dial4Trade did not have mechanisms to verify the identity and licensed status of the buyer before the purchase of Ammonium Nitrate.
The platform was further found lacking mechanisms to ensure transaction traceability, as required under the Ammonium Nitrate Rules, 2012.
The CCPA also pointed to the absence of cautions regarding legal restrictions on possession and use of the substance and the consequences of unauthorised possession.
The CCPA said the listing on Dial4Trade was also accompanied by imagery depicting explosions and blast effects. The Authority observed that such imagery was likely to attract attention to the product rather than communicate its hazardous and regulated nature.
CCPA Terms Dial4Trade Listing a Misleading Advertisement
The CCPA held that a product listing hosted on a digital marketplace and communicated to the public over the internet falls within the definition of an “advertisement” under Section 2(1) of the Consumer Protection Act, 2019.
The Authority further 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 under Sections 2(28) and 2(47) of the Act.
Based on its findings, the CCPA determined that the manner in which the Ammonium Nitrate listing was presented on Dial4Trade did not meet the safeguards expected for a regulated substance.
Also Read: CCPA Fines PhysicsWallah ₹5 Lakh for Dark Patterns, Orders Removal of Misleading Practices
Dial4Trade Calls Itself a B2B Marketplace Intermediary
During the proceedings, 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 this contention, noting that the Dial4Trade platform permitted the purchase of the substance in quantities as low as a single unit.
The Authority also noted that the platform did not have a minimum order quantity or institutional-buyer verification mechanisms ordinarily associated with a B2B model.
The CCPA further held that the Consumer Protection (E-Commerce) Rules, 2020 apply to marketplace e-commerce entities, irrespective of how the platform describes its business model.
CCPA Examines Dial4Trade’s Intermediary Safe-Harbour Claim
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.
According to the CCPA, Dial4Trade’s compliance mechanism relied only on reactive removal of listings after detection, rather than verification at the point of listing. The Authority found this approach insufficient in the case of regulated and hazardous substances.
The CCPA also noted that Dial4Trade had the ability to block sellers and delist products from its platform. The Authority said this indicated that the platform exercised control over the content hosted on it.
CCPA Action Against Dial4Trade Part of Sector-Wide Examination
The action against Dial4Trade forms part of the CCPA’s ongoing examination of e-commerce platforms concerning the unauthorised online sale of hazardous chemicals, explosive substances and related precursors.
The substances under examination include Ammonium Nitrate, Gun Powder, Picric Acid and Pentaerythritol Tetranitrate (PETN).
The CCPA’s sector-wide examination covers multiple online platforms. The matter is currently under examination in respect of India MART, Justdial, Sigma-Aldrich India, Exporters India, Ibuychemikals, Alpha Chemika and TradeIndia.
The action involving Dial4Trade comes as the Authority examines the manner in which regulated hazardous substances are listed, advertised and offered for sale through online marketplaces.
CCPA Reiterates Due-Diligence Requirements for E-Commerce Platforms
The CCPA noted that Ammonium Nitrate is a regulated substance whose unauthorised sale or possession without prescribed safeguards can pose risks to public safety.
The Authority reiterated that consumers rely on product listings and descriptions while making online purchases. It said e-commerce platforms are required to undertake appropriate due diligence when dealing with regulated products.
In the case of Dial4Trade, the CCPA’s findings focused on the absence of licence verification, buyer eligibility checks, transaction traceability mechanisms and mandatory safety-related disclosures associated with the online listing and sale of Ammonium Nitrate.
The Authority’s order directs Dial4Trade to immediately discontinue the listing, hosting, advertising or facilitation of the sale of Ammonium Nitrate and any other substance classified as an explosive under the Explosives Act, 1884.
The CCPA reaffirmed its commitment to protecting consumer rights, preventing unfair trade practices and strengthening compliance by e-commerce platforms, particularly in relation to regulated and hazardous products.
The penalty imposed on Dial4Trade and the directions issued by the CCPA form part of the Authority’s broader examination of online platforms dealing with listings of hazardous chemicals, explosive substances and related precursors.
