CONSUMER PROTECTION IN THE ERA OF E-COMMERCE


INTRODUCTION

WHAT IS CONSUMER PROTECTION ACT?

The Consumer Protection Act was enacted in 1986. Consumer complaints were easily and quickly compensated under the Consumer Protection Act, which was enacted in 1986. It protected and encouraged customers to speak up about inadequacies and defects in products and services. The statute protected consumers’ rights if traders and manufacturers engaged in illicit trade. The fundamental goal of this forum was to provide assistance to both sides and to eliminate conflict. Except for those exempted by the central government, this Protection Act covered all goods and services from the public, private, and cooperative sectors. The act provided a venue for consumers to raise complaints, after which the forum took action against the offending supplier and compensated the customer for the inconvenience he or she experienced.[1]

The new Consumer Protection Act, 2019, went into effect in India on July 20, 2020, replacing the old enactment from 1986.. In India, the new Act restructures the administration and resolution of consumer disputes. It imposes severe penalties, including prison sentences, for adulteration and false advertising. More crucially, it now establishes guidelines for the sale of commodities via the internet. E-commerce standards, which are now part of the Consumer Protection Act of 2019, apply to all commodities sold via a digital platform and make online sellers more accountable and visible, but they also put millions of online purchasers at the forefront of the new rulebook. In previous times, the rise of electronic commerce brought with it a slew of legal and consumer issues. We were seeing a convergence of new technology and financial sector liberalization in India. Consumers needed to be protected in that period of rapid change, and the law was trying to keep up. But now, especially after the enactment of the Consumer Protection Act, 2019, the new Central Consumer Protection Authority (CCPA) has been given broad powers to investigate and prosecute those who violate consumer rights.

Prag Ice & Oil Mills v. Union of India(1978) 3 SCC 459, it was held that the consumer’s best interests must be prioritized, and the primary consideration that an important commodity should be made available to the general public at a reasonable price must take precedence over all other considerations.[2]

WHAT IS E-COMMERCE?

According to section 2(16) of the Consumer Protection Act, 2019 “e-commerce” means buying or selling of goods or services including digital products over digital or electronic networks; In simpler words, Electronic commerce, sometimes known as eCommerce, refers to any industrial or business transaction that involves the transmission of data via the Internet. It includes everything from consumer-facing retail sites to auction and music sites, as well as business swaps where companies trade commodities and services. It is one of the most important aspects of the Internet that has only recently become available. Consumers may electronically exchange goods and services with no time or distance constraints because of e-commerce. Over the last five years, electronic commerce has risen at a breakneck pace, and this trend is projected to continue, if not increase.[3]

CONSUMER PROTECTION IN THE ERA OF E-COMMERCE

Consumer Protection Act, 2019 comes at a time when consumer preferences are fast shifting online, and in a post-COVID future, India is projected to see a massive increase in internet buying.  

Some major highlights of the Consumer Protection Act, 2019 are as follows-

  • A disgruntled consumer can register a complaint about a flaw in goods or a deficiency in services from her home, rather than the seller’s or service provider’s company or residence. Consumer complaints can now be filed electronically under the new law. For example, If a seller sold defective products from Mumbai to a buyer in Lucknow, the buyer was required to submit a claim in the seller’s city. The buyer can now launch a complaint in his hometown, forcing the vendor from Mumbai to appear in court in Lucknow.[4]
  • The new law introduces the notion of product liability, allowing disgruntled consumers to seek large compensation as a result of the manufacturer’s or service provider’s conduct.
  • If the claim is less than Rupees 5 lakhs, there are no fees to pay
  • Video conferencing allows a customer to handle her own case. It is not essential to retain the services of a lawyer.[5]
  • To decrease costs and improve the possibilities of redress or settlement, a group of unhappy consumers can band together and launch a class action suit.
  • Producers of counterfeit items may face prison sentences.
  • E-commerce is now heavily regulated, with e-commerce companies required to publish all relevant product information, including country of origin, as well as respond to consumer complaints within certain time frames.
  • In some cases, deceptive advertising can result in jail time. Celebrities who endorse a product may not be penalised, but they may be prevented from doing so in the future if the commercial is deceptive. The Central Authority, under Sections 21(2) and 89 of the 2019 Act, has the jurisdiction to impose a penalty on a producer or advertiser who makes a false or misleading advertisement.[6] It can impose a penalty of up to ten lakh rupees on the producer or advertiser by order. In Horlicks Ltd. v. Zydus Wellness Products Ltd., 2020, on the basis that the advertising comparing Complan to Horlicks was misleading and insulting, the High Court issued an interim order prohibiting Zydus from broadcasting it. Various judgements on misleading advertisements, disparagement, and the law governing the publication of commercials on television were cited by the Court. In the end the court passed the order stating, that when watching the TV commercial, there is no narration for the disclaimer about the serve size, and there isn’t enough time to read the disclaimer. In light of this, the current commercial in the electronic media would be clearly insulting, as a viewer only sees a comparison of one cup of complan with two cups of horlicks with a single glance at the advertisement. The Court further stated that the electronic media is a very potent channel of communication that leaves a permanent impression on the viewer’s mind. As a result, the Court determines that the plaintiffs (Horlicks) have shown a prima facie case in their favour, and that the plaintiffs will suffer irreparable harm if an interim injunction is not granted.[7]
  • Settlement of consumer disputes by mediation, i.e. with the assistance of a neutral third party outside of the consumer court, is encouraged under the new rule, saving disputing parties time and resources that might otherwise be spent on formal dispute settlement.
  • Consumers today have a number of rights that are protected, including the right to safety, knowledge, choice, and restitution, as well as the right to be heard, to be educated as a consumer, and to a mediated settlement.

It is critical to have a solid consumer redress process in place in order to build customer trust. While online platforms have made and continue to take steps to address issues such as counterfeit items, rogue sellers, and disappointing transactions, the Act will help to establish even more confidence and rigor in dealing with customer complaints. Consumers and their rights are at the heart of the new guidelines, which are intended to aid informed decision-making through ethical and honest communication.[8]

How to identify counterfeits was a major difficulty for online customers, as many didn’t have access to information about merchants listed on marketplaces. But, people can now go to e-commerce websites, look up vendor information, and ask questions, make complaints, or pursue legal action. Moreover, these laws primarily benefit consumers who have been trapped with phony or damaged goods by providing a stronger consumer redress system. It will help handle at least half of the consumer issues.

CONCLUSION-

Thus, we can conclude by stating that, putting in place such a comprehensive grievance redressal procedure was plainly the need of the hour. With the introduction of the Consumer Protection Act, 2019, the government has made a step on the right path. There were no regulations in place to govern the ever-expanding e-commerce industry. The Consumer Protection Act of 2019 establishes restrictions for unfair trade practices and fraudulent advertising. Though there are certain flaws in this act too, like it does not discuss the issue of delivery charges, which can be quite high at times. According to my, sellers who demand delivery fees should be subjected to some sort of cap. This will reduce the injustice to some more extent. But, as is said that nothing is built on the lines of perfectionism, thus, similar is the case with Consumer Protection Act, 2019.

The difficulties that had plagued the e-commerce business for a long time were addressed through the Consumer Protection Act, 2019 and thus this activity altogether is successful in nature.

[1] Dr. R.K Bangia’s Law of Torts including compensation under the Motor Vehicles Act and Consumer Protection Laws 515-516 (25th edition, Allahabad Law Agency)

[2] Prag Ice & Oil Mills & Anr V. Union Of India [1978] Insc 43; Air 1978 Sc 1296; 1978 (3) Scr 293; 1978 (3) Scc 459 (21 February 1978)

[3] Consumer Protection Act, 2019, section 2(16)

[4] Chawla, N., Kumar, B. E-Commerce and Consumer Protection in India: The Emerging Trend. J Bus Ethics (2021),SPRINGER LINK (July 19th , 2021, 5:00 PM),  https://doi.org/10.1007/s10551-021-04884-3

[5] Rajat Yadav & Taksh Sharma, Proposed Amendments to Consumer Protection (E-Commerce) Rules, 2020, INVEST INDIA NATIONAL INVESTMENT PROMOTION AND FACILITATION AGENCY  (July 19th, 2021, 10:30 PM), https://www.investindia.gov.in/team-india-blogs/proposed-amendments-consumer-protection-e-commerce-rules-2020

[6] Consumer Protection Act, 2019 section 21(2) and Consumer Protection Act, 2019 section 89

[7] Horlicks Ltd. v. Zydus Wellness Products Ltd., 2020

[8] Priya Rao, Partner, K&S Partners Intellectual Property Attorneys, India, Legal provisions for protection from purchasing spurious goods through E-commerce under The Consumer Protection Act 2019 and Consumer Protection (E-Commerce)Rules,2020,THELEGAL500(July23rd,2021,11:00AM), https://www.legal500.com/developments/thought-leadership/legal-provisions-for-protection-from-purchasing-spurious-goods-through-e-commerce-under-the-consumer-protection-act-2019-and-consumer-protection-e-commerce-rules-


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