Dual Pricing

 Dual Pricing

Consumer, an individual buying goods or services for personal use, is an integral part of the society. He is the one who makes a purchase not for a resale or intermediate use, but instead for consumption, which will cater to his needs, that is to say, provide him with the satisfaction he urges for, his equilibrium or probably the state he never wants to deviate from He is the one who ultimately falls a bait to all the marketing and advertising, which anyhow influence his decision to buy the product. Obviously, he isn’t enjoying the good or services without consideration. He pays or promises to pay, an equitable consideration in form of money or thing, for the good purchased or services availed. Indian law provides a very extensive definition of consumer. According to Section 2(1) (d), of Consumer Protection Act, 1986 a consumer, means any person who buys the goods or services for the purpose of consumption and not for any commercial cause.

The newfangled era, is known to be the era of consumers. No country can basically ignore the interest of the consumers intentionally or unintentionally. A consumer is the one, who spends his money to but the goods and services, producer provides. Hence, they are known for their vital role, they play in the economic system of any country.

Mahatma Gandhi once said, "A consumer is the most important visitor on our premises. He is not dependent on us, we are on him. He is not an interruption to our work; he is the purpose of it. We are not doing a favor to a consumer by giving him an opportunity. He is doing us a favor by giving us opportunity to serve him.” 

Consumers, in the contemporary times, have been subjected to numerous instances of exploitation and malpractices such as adulteration, wrong use of weights, false advertising, for misrepresentation, to quote a few. This article, throws light on the burning issue of the hour, to which every consumer falls a prey to, that is to say, the problem of dual pricing. Referred as price discrimination in layman’s language, it refers, to the practice of charging different prices for the same products, to different set of consumers.

More aptly referred as a technique, for charging different prices, in different markets, it is a well devised scheme, via which a company is able to offset a lower price in a new market, helping to drive out competition out of the same. Being a tool, in the hand of industrialists, they craftily manipulate the prices, so as to meet the higher demands and reap higher profits. Dual pricing, at times, even protects the domestic business by the virtue of subsidies and taxes, to save them from competition. For example, Indian Railways, the national carrier of the country, all the men above 60 years and women above 58 years, pay approximately 40% and 50% concessional fare respectively, in comparison to the men and women aged below 60 and 58 years. A kid below the age of 5 need not pay any fare at all etc. shows case of dual pricing. The retailers do that because, there might be a condition when, an online sale saves various costs of marketing and transportation, which have to be paid in an offline sale. Also, while dealing with different set of customers and durations of time, a commodity priced at X, may be sold to an affluent customer in summer, but the same price is reduced to X-20%, when no longer that affluent customer generates a demand in winter. Hence, a stock clearance sale is a perfect example to compliment this. The same Frooti, in KFC costs Rs. 85, which outside its premises, is available at Rs.20, with a roadside vendor.  Taking into account the maximum cases of dual pricing, it is important to determine the legitimacy of this practice. One instance of dual pricing might sound, completely justified from the point of view of sellers; the other may violate the rights of the consumer for the worse. While proceeding further, it is important to determine the ultimate stand of law on dual pricing both in national and international markets, and how far it is genuinely implemented.

Though India is a signatory of various international treaties on consumer protection and an act like the Legal Metrology Act came into force in 2011 too had an ambiguous status of legitimacy of dual pricing.  Analyzing the position, it stands highlighted that a major chunk of interpretation as to the legitimacy of dual pricing has been made by the judiciary. The Supreme Court via its innumerable judgment has been successful enough to bring forward as to when and how, are the interests of the sellers and buyers, be harmoniously construed, and as that none suffers and feel exploited.

Be it conformity with law or the larger national interest, delivery of services or a comfy environment, sufficient grounds for upholding dual pricing have been evolved by the court by a series of judgments. It appears, as if the judiciary is extraneously burdened with interpretation of law regarding dual pricing. The rationale and dicta it provides, serves more purpose than the explanations of legislature acts. Sadly, despite dual pricing, extending its roots deep, in every market transaction, the legislature until now, has been not able to frame a law, which efficiently tackles all the exceptions and explanations to dual pricing. It will all the way save a whole lot of time for the courts, to explain as to the why and why-nots of holding and discarding price discrimination.

 - Prasann Malviya 

Hidayatullah National Law University, Raipur