Caveat Emptor!
Recent ruling, by the District Consumer Redressal Forum, in the case of Baglekar Akash Kumar and More Megastore Retail Limited on the issue of extra charging for carry bags with the company’s logo imprint over the bags, by the super market and potentially using customers as their advertisement agents has been held as unfair trade practice.
As per section 2(1) (r) of the Consumer Protection Act, 1986 (corresponding section 2(47) of the Consumer Protection Act, 2019), the District Consumer Disputes Redressal Commission -II, Hyderabad has found this to be unfair.
Facts:
Complainant on June 1, 2019 purchased a product worth Rs. 115/- and was charged additional Rs. 3/- for plastic cover with the company’s logo over it, totalling the invoice to Rs. 118/-. The Complainant, found the practice to be unfair and approached the Telangana State Information and Alternative Disputes Centre on the same day to request for the necessary action against the More Megastore. Amicable settlement failed and the Complainant took the case to the District Forum to seek redressal.
Interestingly, the Company defended by saying,
- It was a matter of choice of the consumers and not a compulsion;
- free will at the hands of buyers; and
- no legal provision stopping the sellers from charging for the plastic/ carry bags.
The OP took it a step further that it was with good intentions that there were no restrictions on the consumer from bringing one’s own carry bags and it was complying with requirements of providing carry bags under the Plastic Waste Management Rules, 2011 (last amended 2018 which has removed charging for carry bags). The allegation of using buyers as Advertisement agent was denied for the above reasons stated by the OP.
The Forum held disclosure of price of carry bags at the pay counter was unfair trade practice and that the OP used its customers as advertisement agents by selling the carry bags with their Logo without prior intimation of price, which could have impacted the decision of the consumer. In doing so, the customer’s right of making an informed decision was violated. CCI, went a step further and stated that it was an unfair trade practice and also amounted to deficiency in service by the OP. Further, the OP was directed to sell the carry bags with Logo, free and to charge only for the plain carry bags.
Several similar cases of unfair trade practice* exist, where big brands charge arbitrary for the bags.
*Unfair trade practice as per section 2 (r) of CPA, 1986 means any trade practice to promote the sale, use or supply of any goods or service adopts any unfair method or practice which also includes materially misleading the public concerning the price at which a product or goods or services have been or are ordinarily sold or provided.
In a recent case of 2020, Big Bazaar (Future Retail Ltd.) v. Sahil Dawar [RP 975 of 2020], the buyer was charged Rs. 18/- extra for the carry bag. The NCDRC observed that it is a consumer’s right to know about the details before choosing to patronize a particular retail outlet followed by his selection of goods for purchase and additional costs that he will be charged for, including for the carry bags.
It further emphasized, to put detailed notice or sign boards in place of prominence to enable consumers to make an informed- free choice. It was held that displaying notice on the pay-counter, accessed at the time of payment only embarrasses the buyer and leads to the unwilling purchase fettering the consumer’s right to informed decisions.
Similar observations were made in the Lifestyle International Vs Pankaj Chandgothia and Westside Vs Sapna Vasudev, and Bata India Limited v. Dinesh Parshad Raturi, Appeal No. 98 of 2019 wherein using the brand logo “Bata Surprisingly Stylish” and “Westside” on the carry bags were considered as a source of advertisement, brand promotion and voluminous undue earnings.
Denying one to bring own carry bag inside the stores and claiming no compulsion on buying the carry bags depicts the irony.
The big brands offer discounts up to 70-80% but charge for a carry bag, which as per PMW notification dated 27.03.2018 is omitted and not available to seek refuge, under.
The Consumer Protection Act does not have enough teeth to suppress this unfair practice prevalent against consumers. The Competition law has such powers under section 18 read with the preamble of the Competition Act which empowers the Commission to protect the interest of consumers against such practices.
The counter to this position being, the status of entities have to be assessed against control over the relevant market likely to cause Appreciable Adverse Effect on Competition.
Brands like Westside, Pantaloons, Lifestyle are all owned and operated by behemoths like Tata Group, Future Retail Private Limited, Aditya Birla Fashion and Retail Limited possessing significant market share and controlling power. A basic component of being dominant is the strength to operate independently of the competitive forces or the ability to affect the competitors.
However, it is a collective power to influence dominance and not in one market. This strength is not necessarily derived from the same market to be considered as dominant. In Belaire’s Owner Association and DLF Limited, Case No. 19/ 2010, it was observed –
“It is the overall size and resources of an enterprise or the overall importance of a competitor that has to be compared to see comparative position of strength and not the limited manifestation of that strength in a particular product or geographic market.”
The vast market presence of multiple players in a dynamic market also shows the collective dominance but unfortunately that has got no recognition so far in India. No one entity can be labelled as affecting competitors or consumers or the market in the entity’s favour. In Ashok Kumar Vallabhaneni v. Geetha SP Entertainment LLP, 2019 SCC Online CCI 27, it was alleged that the OPs (who had control over more than 80% of local movie theatres in the states of Telangana and Andhra Pradesh) were indulging in cartelization by not offering sufficient number of screens to exhibit its dubbed movie and thereby causing monetary loss.
Suo-Moto intervention by CCI is desirable for investigation into anti-competitive behaviour of the retail operators, using consumers as agents to advertise the brands or to pass directions to ensure the retail stores in India do not infringe upon the consumer’s right in the day-to-day shopping chores.
Global perspective:
In UK and the Netherlands, the enforcement of Unfair Commercial Practices Directives is the task of competition or consumer authorities.
On ambiguous matters of consumers right and anti-competitive concerns, it might serve India to follow UK and allow CCI and Consumer Forums to come together to deal with these in an effective manner. Increase in cases of unfair trade practice cases before the consumer forums is an indication of misuse and abuse of dominant position. However, imposing penalties by the Consumer Forum, do not seem adequate measure to curb such practices.
The blog on advertisement by corporates on Carry Bags is only for information purposes. Nothing contained herein is, purports to be, or is intended as legal advice and you should seek legal advice before you act on any information or view expressed herein. Endeavoured to accurately reflect the subject matter, without any representation or warranty, express or implied, in any manner whatsoever in connection with the contents of this. This isn’t an attempt to solicit business in any manner.