Falling afoul of law? Amazon, Flipkart insist on Aadhaar details for loan-based sales ahead of festive season

Priyanka Sahay
Moneycontrol News

Amid the marketing blitz ahead of the festive season sales, e-commerce giants Amazon and Flipkart seem to have stepped on the wrong side of the law. They are offering Rs 60,000 as credit to consumers under their cardless scheme and are seeking Aadhaar details of customers, days after the Supreme Court said private companies cannot insist on Aadhaar.

The issue came to light after a Twitter user said he was asked for his Aadhaar card details while applying for Flipkart's cardless credit offer.

Hey @Flipkart even after Supreme Court judgement how are u demanding Aadhaar number of customers? And doing Aadhaar verification using mobile OTP ? Don't you know Supreme Court has barred private companies to use Aadhaar of citizens ? Don't you know it's illegal now ? pic.twitter.com/XSAyiEqvxX

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— Shailendra (@I_have_to_ask) September 30, 2018

In order to tap customers who do not have debit or credit cards, both e-tailers have launched a cardless credit card this festive season. Companies are offering customers credit up to Rs 60,000 depending on their shopping and payment patterns. Customers will get to know their approved credit limit after signing up. For signing up, they need to submit their pan card and Aaadhaar details.

The Supreme Court delivered its judgment on petitions challenging the constitutional validity of the Aadhaar Act last month.  A five-judge bench, headed by Chief Justice of India Dipak Misra and justices AK Sikri, AM Khanwilkar, DY Chandrachud and Ashok Bhushan ruled that Aadhaar will stay, but with conditions.

The bench stressed that Aadhaar is meant to help benefits reach the marginalised sections of society.

However, it also read down certain sections of the Act. The national security exception under Section 33 was struck down. Section 57 was also read down, which means that private companies cannot insist on the Aadhaar details of customers.

Despite the ruling, Flipkart, which was acquired by Walmart earlier this year, and US-headquartered rival Amazon are seeking Aadhaar details to offer cardless credit to their customers.

The two companies did not respond to the emails sent by Moneycontrol.

According to legal experts, the judgement has lots of ambiguity and can potentially provide conflicting signals.

"The ruling says that if a person voluntarily wants to provide his/her Aadhaar details as proof of identity, there may not be a problem. Therefore, each side have their own justification," said a corporate lawyer.

"The more prudent way forward would be to approach the Supreme Court and seek a clarification. There is a possibility that because of the huge length and breadth of the decision, there could be a possible unintended disconnect. So, it is better to put this to rest," he added.

The ruling has indeed impacted banking and telecom companies who were using the identity framework for authentication.

According to a media report, the Unique Identification Authority of India (UIDAI) has no plans to come up with a list of clarification on implementation of the court's order.

The report quoted Ajay Bhushan Pandey, Chief Executive Officer of UIDAI, as saying that it is up to the companies and their sector regulators to implement the court's order banning private companies from using the identity framework for authentication.

"This is because they are in the best position to know exactly what kind of operations they are running, for what purpose they are collected and used, and if they did so, then how to replace the Aadhaar eKYC with other valid documents so to comply with the orders of the court and their regulators and ensure continuity of service to their customers," he was quoted as saying in the report.