How CCPA’s Rs 2 Lakh Fine On FirstCry Could Reshape E-Commerce Discount Practices?

The Central Consumer Protection Authority (CCPA) has fined FirstCry Rs. 2 lakh for misleading consumers by adding Goods and Services Tax (GST) at checkout despite showing “MRP inclusive of all taxes”. The regulator said this practice amounts to drip pricing, a dark pattern under its 2023 guidelines, and violates Rule 7(1)(e) of the Consumer Protection (E-Commerce) Rules, 2020.

Order Details

The CCPA imposed the penalty on Digital Age Retail Pvt. Ltd., which operates FirstCry, under Sections 10, 20, and 21 of the Consumer Protection Act, 2019. A consumer complaint triggered the case after buyers reported that FirstCry displayed products with the claim “MRP inclusive of all taxes”, but added GST on the discounted price at checkout.

Investigators used data from the National Consumer Helpline and found that discounts advertised as 27% dropped to about 18.2% once GST was applied. The CCPA held that this practice amounted to deceptive pricing, misleading advertisements under Section 2(28), and unfair trade practices under Section 2(47) of the Act.

Moreover, the order noted that disclaimers such as “additional charges may apply” or “GST and Add’l charges may apply on discounted price” did not override the statutory requirement that the MRP must be inclusive of all taxes. By displaying prices as tax-inclusive but charging GST at the final stage, FirstCry misled consumers about the actual benefit of discounts.

Abhishek A Rastogi, Founder of Rastogi Chambers, said that the order is not just an isolated penalty but a message to the entire digital marketplace, including e-commerce and quick commerce outifts.

“By treating drip pricing as an unfair trade practice under Rule 7(1)(e) of the E-Commerce Rules and linking it with the Dark Patterns Guidelines, 2023, the regulator has reinforced that all displayed prices must be upfront and tax-inclusive,” Rastogi said.

“The practice of showing a lower base price and adding compulsory charges at checkout is unlikely to survive regulatory scrutiny, and disclaimers such as ‘additional charges may apply’ may no longer provide sufficient cover,” he further mentioned.

Legal Context

The Guidelines for Prevention and Regulation of Dark Patterns, notified in 2023, define drip pricing as concealing compulsory charges until checkout. According to the guidelines, such practices distort consumer choice and undermine transparency.

Additionally, Rule 7(1)(e) of the Consumer Protection (E-Commerce) Rules, 2020, requires platforms to display the total price of any good or service in a single figure. It also requires a breakup that shows all compulsory and voluntary charges, such as delivery charges, postage and handling charges, conveyance charges, and applicable taxes.

Importantly, the CCPA imposed the penalty against FirstCry under Sections 10, 20, and 21 of the Consumer Protection Act, 2019. To explain:

• Section 10 establishes the CCPA and empowers it to regulate unfair trade practices.

• Section 20 empowers the competition regulator to recall goods, withdraw misleading advertisements, and order refunds.

• And Section 21 specifically gives it the power to impose penalties and ban misleading advertisements.

By presenting MRP as tax-inclusive but adding GST at checkout, FirstCry has breached both the dark patterns guidelines and the e-commerce rules.

Notably, the CCPA’s order appears to link drip pricing with unfair trade practices under the Consumer Protection Act, which could create a stronger legal basis for future enforcement.

Why It Matters?

The order signals that regulators are prepared to classify dark patterns not just as design issues but as statutory violations under consumer law. The ruling also shows that disclaimers may not protect companies if their overall pricing misleads consumers.

Furthermore, the penalty may set a compliance benchmark for e-commerce platforms in India and create a precedent for others that rely on similar tactics during high-discount sales. Its implications extend beyond GST, since regulators could apply the same reasoning to hidden costs like convenience fees, packaging, and delivery charges.

Rastogi said this extension “potentially applies to delivery charges, convenience fees, packaging costs, and other non-optional levies that consumers only discover at the final stage of purchase. Quick commerce platforms, which thrive on speed and impulse purchases, are particularly exposed since their model often depends on delivery or service charges disclosed late in the transaction flow”.

He added that the order “strengthens consumer protection enforcement and signals a more aggressive regulatory posture. Platforms cannot rely on the absence of consumer complaints; they are expected to proactively reform pricing and disclosure systems to ensure transparency. Whether in traditional e-commerce or quick commerce, platforms must recalibrate their compliance strategies to ensure that consumer trust is not compromised at the point of sale”.

The penalty against FirstCry is also notable because of its market position as one of the largest e-commerce retailers for maternity, baby, and children’s products in India. By targeting a leading player at the start of the festive season, the CCPA has signalled stricter oversight of the sector, with scrutiny likely to extend to the transparency of final prices.

For consumers, the order highlights long-standing frustrations about discounts that shrink at checkout, raising the question of whether regulatory action will meaningfully change how platforms structure their pricing.

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