CPA Fines Dial4Trade ₹10 Lakh Over Ammonium Nitrate Listing

• CCPA found no adequate seller licence and buyer eligibility verification.
• Platform lacked required transaction traceability mechanisms and safety disclosures.
• Dial4Trade directed to stop listings and sale of explosive substances.
• Action is part of a wider review of online platforms selling regulated hazardous substances.

GG News Bureau
New Delhi, 2nd Sept: The Central Consumer Protection Authority (CCPA) has imposed a ₹10 lakh penalty on Dial4Trade Technologies Private Limited for facilitating the online listing, advertising and sale of Ammonium Nitrate without mandatory regulatory safeguards.

The final order was passed by the CCPA under Sections 10, 20 and 21 of the Consumer Protection Act, 2019. The authority is headed by Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra.

During its examination, the CCPA found that Ammonium Nitrate was available for purchase on the platform without adequate safeguards, including disclosure of valid Petroleum and Explosives Safety Organisation (PESO) licence details of sellers and verification of buyers’ identity and licensed status.

The authority also found that mechanisms for transaction traceability, as required under the Ammonium Nitrate Rules, 2012, were not in place. The listings did not adequately caution users about legal restrictions governing possession and use of the substance.

The CCPA further noted that some listings carried imagery depicting explosions and blast effects. According to the authority, such imagery could attract attention to the product instead of communicating its hazardous and regulated nature.

The authority held that product listings communicated to the public through a digital marketplace constitute an “advertisement” under the Consumer Protection Act, 2019. It said presenting a regulated explosive substance as an ordinary consumer product without informing users about licensing requirements amounted to a misleading advertisement and unfair trade practice.

B2B intermediary claim rejected
Dial4Trade had argued that it operated as a Business-to-Business (B2B) marketplace intermediary and should not be responsible for listings uploaded by third-party sellers.

The CCPA rejected the contention, noting that the platform allowed the substance to be purchased in quantities as low as a single unit and did not have minimum-order or institutional-buyer verification mechanisms normally associated with a B2B model.

The authority also held that the Consumer Protection (E-Commerce) Rules, 2020 apply to marketplace e-commerce entities irrespective of how they describe their business model.

On Dial4Trade’s reliance on intermediary safe-harbour protection under Section 79 of the Information Technology Act, 2000, the CCPA said such protection is subject to prescribed due-diligence requirements.

The authority found that relying only on reactive removal of listings after detection was insufficient for regulated and hazardous substances, where verification is required at the point of listing.

Wider review of e-commerce platforms
The action against Dial4Trade forms part of the CCPA’s wider examination of online platforms concerning the unauthorised 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 platforms currently under examination include IndiaMART, Justdial, Sigma-Aldrich India, Exporters India, Ibuychemikals, Alpha Chemika and TradeIndia.

The CCPA said Ammonium Nitrate is a regulated substance and that unauthorised sale or possession without prescribed safeguards can pose risks to public safety.

The authority reiterated that e-commerce platforms must undertake appropriate due diligence when dealing with regulated products and said the action was aimed at strengthening consumer protection and preventing unfair trade practices.