CCPA Imposes Penalties on Justdial and Sunrise Foods for Misleading Practices

Regulatory Action by CCPA

The Central Consumer Protection Authority (CCPA) has issued orders imposing financial penalties on Justdial and Sunrise Foods following investigations into consumer safety violations and misleading marketing claims.

Penalties and Findings

• Justdial (Penalty: Rs 10 lakh): The authority penalized the online business directory for hosting listings of ammonium nitrate, a regulated explosive substance. The CCPA noted the platform lacked mandatory safeguards, such as verifying sellers' Petroleum and Explosives Safety Organisation (PESO) licenses, confirming buyer eligibility, and ensuring transaction traceability. The platform also failed to display warnings regarding legal restrictions on the substance.
• Sunrise Foods (Penalty: Rs 1 lakh): The food manufacturer was penalized over the marketing of its "Everyday 100% Whole Wheat Bread." Investigation revealed the product contained only 64% whole wheat, failing to meet the required 75% threshold to claim that nomenclature. The packaging also failed to disclose the actual composition to consumers.

Company Responses and Directives

Justdial argued that it functions as an information-listing service rather than a trading platform and that listings were derived from public data. The CCPA rejected this, ruling that the company cannot rely solely on vendor claims. Justdial has been ordered to immediately cease all listings and facilitation related to ammonium nitrate.

Sunrise Foods contended that its "100%" claim indicated that the flour used was exclusively whole-wheat, not refined. The CCPA ruled that this labeling creates a misleading impression for consumers. The company must discontinue the misleading advertisements across all media platforms and submit a compliance report within 15 days.