AMITY LAW SCHOOL,

NOIDA

RESEARCH PAPER

ON

“CONSUMER PROTECTION ACT, 2020 IMPACT ON E-COMMERCE”

SUBMITTED BY SUBMITTED TO

DR. MEENU GUPTA

DEEPANSHU GURNANI
LLM(CB&IL)
SECT I O N A
A3268622022
ABSTRACT

The advent of new technologies such as the internet and other networks have changed the
business world and provided the trading processes in e-business more efficiency. This
technological Improvement has brought faster means of conducting business transactions,
different from that of paper transactions as the steps that are necessary to conclude and form an
e-contract is different and may be considered more technical than usual traditional contracts.

Slowly, e-commerce is dominating Indian scenario and it has been benefitting customers by
offering different range of products at competitive price. Thus, there is e-contract between
individual and individual, organization and individual and organization and organization.
Therefore, a legal relation is created between parties using electronic medium. If their respective
roles and parts of legal relationship are performed there would be no dispute. But once there is
some variance, certainly, there will be dispute between parties and they need judicial forum to
adjudicate their dispute. This paper intends to deepen the understanding of the rights guaranteed
to the consumers under the CONSUMER PROTECTION ACT, 2020. Also, the challenges that
are faced by consumer with the rise of e-commerce in our day-to-day life.

KEYWORDS:

Consumer protection law; e-commerce; central consumer protection authority;

INTRODUCTION

As soon as digital goods are exchanged between different parties, the need arises for digital
contracts. The rapidly growing interest in digital goods of various kinds (e.g. music files, access
to digital libraries, or e-learning content) is thus accompanied by increasing demand for digital
contracts. To be precise, on evolving online brokerage platforms 'usage rights' for digital goods
are exchanged rather than the goods themselves, but in this paper we simply use the term 'digital
goods.' Digital contracts re intended to specify terms and conditions and to enable the automated
processing of online business transactions to a certain extent.

For the purposes of this paper, we will presuppose that a digital contract is a document
formulated in a digital rights language. At modeling level, a digital contract can be seen as a

2
composition of different contract objects with various attributes. In other words, a digital
contract aggregates several interrelated objects.

Contract objects can be subdivided into core objects with core attributes, which have to be
included in any kind of digital contract, and additional domain-specific objects and/or domain-
specific attributes, which may be added according to the intended use of a specific contract. This
means that a digital contract can be composed more precisely if the usage scenarios for a
particular contract are known in advance. We thus aim to provide a conceptual framework
which enables the composition of digital contracts tailored to the requirements of specific usage
scenarios. Moreover, we propose a first step toward a conceptual framework for the composition
and fulfillment of digital contracts.

The remainder of the paper is structured as follows: In Section 2 we give an overview of the
contract life cycle and describe the basic states and state transitions for digital contracts. In
Section 3, we proceed

International Workshop for Technology, Economy, Social and Legal Aspects of Virtual Goods,
2003, Illmenau, Germany to identify core contract objects, with each object type covering a
specific kind of information (such as the personal data of the different contracting parties, or the
rights and duties defined by a contract). Subsequently, we mention various usage scenarios for
the application of digital contracts (e.g. access control or customer relationship management).
In Section 4, we then propose a basic process for the tailored composition of digital contracts. 1
We then deal with the subject of contract execution/fulfillment and rights consumption in
Section 5, where we go into detail on the relationship between digital contracts and digital
tickets. Section 6 concludes the paper and gives an overview of future activities.

E-COMMERCE

After advent of information and communication technologies, an avenue was created for
commerce and trade. Thus, electronic commerce (e-commerce) was developed. This e-commerce
picked up momentum in America and Europe by 1990s. At the international level, an attempt
was made to recognize and to bring this e-commerce within legal framework so that it can be

1
The Collaborative Online Learning and Information Services (COLIS) Project Homepage.
http://www.colis.mq.edu.au.

3
regulated. Accordingly, in 1996 a step was taken by the United Nations to draft a Model Law.
Within span of some 4-5 years, e-commerce gained pace in India and it would not be wrong to
say that it is still in developing process. Realizing its potential growth, Indian government
enacted Information Technology Act, 2000 for regulating e-commerce. Speaking purely from a
customer‘s perspective, as of now, some websites are offering sale of goods and offering
services. Apart from that, even major corporate houses have created their presence in virtual
world for trading. Banking and insurance sectors have gone a sea change after development of
internet.

Slowly, e-commerce is dominating Indian scenario and it has been benefitting customers by
offering different range of products at competitive price. Thus, there is e-contract between
individual and individual, organization and individual and organization and organization.
Therefore, a legal relation is created between parties using electronic medium. As long as their
respective roles and parts of legal relationship are performed there would be no dispute. But once
there is some variance, certainly, there will be dispute between parties and they need judicial
forum to adjudicate their dispute.

METHODOLOGY:

The method of study will be purely doctrinal or non- empirical. The study will take note of the
latest developments and trends in the field of study through different literary sources available.
The nature of the topic is such that the best suited methodology of carrying out this research will
be the pure doctrinal method further, due to several constraints and the nature and the complexity
of the topic carrying out an empirical study does not seem to be a viable option. So, the best
suited methodology is pure doctrinal in nature.

Tools
The present study will be carried out with the help of different books, including e-books, written
by Indian and foreign authors, legal and information technology journals national as well as
international. For carrying out this study different web resources will also be used including legal
data bases such as www.archive.org, www.lexisnexis.com, www.westlaw.com,

4
www.heinonline.com, www.jstor.com, Wilson etc.… further the journals written by professors
of different universities and different resource persons such as research scholars on the relevant
topic will also be used.

The Sources Relied Upon for the Research


Primary Sources: Statutes/Enactments, judicial decisions (Reporters on Judicial Decisions),
International Conventions and other sources of binding legal authority.
 Secondary Sources: Textbooks, Books of renowned authorities, magazine articles,
histories, criticisms, commentaries, encyclopedias, Journals, News Papers (Editorials and
Articles) and other Publications.

The study is taken out only to discuss legal regime of e-contract in India. A primary concern of
the study will revolve around The Consumer Protection Act, 2020.

STATEMENT OF PROBLEMS:

With this backdrop, these e-contracts have posed some challenges which have been posed to the
existing legal system in India. Therefore, following points are the statement of problems in this
study:
 Whether the Information Technology Act, 2000 and Indian Contact Act, 1872 have cover
and regulate e-contracts in Indian conditions?
 Whether Indian judicial system is fully equipped to adjudicate disputes arising out of e-
commerce as it being techno-legal in nature?
 What are the issues likely to cause impediments in judicial process?
 While discussing in Indian context, late 1990s and early 2000s witnessed exponential
growth of internet in India. The simultaneous development in technology brought new
dimension to usage of internet.
OBJECTIVES OF STUDY
Electronic contract (E-Contract) is a contract which is formed through electronic communication.
These can be entered either through e-mail or click wrap or browse wrap agreements. At present
there is an increase in e-commerce consequently there is also an increase in e-contract.

5
The law concerning this subject is still developing. Rapid developments in information and
communication technologies brought in some new issues and judiciary is not so well equipped to
handle these techno-legal issues. Therefore, research in this area is necessary to understand the
legal regulation in Indian context. There are many issues which must be addressed. The
Information Technology Act, 2000 is good for cybercrimes but it has addressed little about e-
contract and only three sections of the statute speak about e-contracts.
Hence this study has following objectives:
 To understand how principles of traditional contract evolved in Indian context and can be
made applicable to e-contracts
 To understand adequacy of Information Technology Act, 2000 and Indian Contract Act, 1872
to deal with e-contracts in India
 To understand overall legal framework and issues likely to arise before Indian judiciary
while deciding disputes relating to e-contracts
 To understand whether same principle of law is applicable to e-contracts executed using
different mode of electronic communication
 To understand international developments concerning e-contracts

REVIEW OF LITERATURE
However, there is no much literature is available on e-contract, the research topic is relying more
on the policies of the Government and theories expounded by the renowned jurists, the method
adopted for the research is substantially doctrinal one. The research in question is to derive its
materials for its investigation from both Primary and Secondary resources. For the analysis of
law relating to e-contract primary resources such as, Information Technology Act, 2000, Indian
Contract Act, 1972, Sale of Goods Act, 1930 have been considered. In addition to these laws, the
Model Law on Electronic Commerce, the United Nations Convention on the Use of Electronic
Communications in International Contracts, the United Nations Convention on Contracts for the
International Sale of Goods & UNCITRAL Model Law on Electronic Signatures have been
considered.
Apart from above primary resources the research is much relied on secondary resources. The
secondary resources like books including e-books, journals and study reports, seminar papers
have been used in this research. Even some Indian and foreign case laws have been examined for

6
this research. However, the laws concerned with e-commerce and allied laws of contract have
largely facilitated to understand crux of e-contract.

HYPOTHESIS
In the background of aforesaid problems and objectives set forth, the hypothesis that has been
formulated and tested:
 The Consumer Protection Rules, 2020 aims at providing transparency in provision of
information and disclosure by the e-commerce platforms to the consumers.

 Legal regulation in India needs a rapid change to handle disputes arising out of e-
contracts under the ambit of e-commerce.

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 E-COMMERCE AND E-CONTRACT: AN OVERVIEW

INTRODUCTORY

It is known to everyone that computer is amongst the greatest inventions of mankind. In addition
to computer, the invention of internet has brought revolution in field of information technology.
Internet is being used in almost everything such as, electronic commerce, social networking,
dispute resolution, sending mails, internet chat, blogs, etc…Out of these, electronic commerce is
one of the significant features of internet.

The term E-Commerce includes all the activities of a firm or business or an individual may
perform such as buying and selling of products and services alike, by using computers and
communication technologies. It can include a host of activities such as shopping, supply chain
management, automation, electronic payment etc.…. With the development e-commerce, a seller
can reach any part of the globe and the buyer has unlimited choice to access any seller.
Efficiency has been greatly increased, paper work is reduced, time lag shortened and expenses
lessened.

It is worth to mention here that e-contract forms a part parcel of e-commerce. So before dealing
with e-contract, it is mandate on once part to discuss about e-commerce.

Consumer Protection

1. A Larger Market: e-Commerce allows you to reach customers all over the country and
around the world. Your customers can make a purchase anywhere and anytime, especially more
people are getting used to shopping on their mobile devices.

Global advantages of e Commerce

Image source

2. Customer Insights Through Tracking and Analytics: Whether you're sending visitors to
your eCommerce website through SEO, PPC ads or a good old postcard, there is a way to track
your traffic and customers' entire user journey to get insights into keywords, user experience,
marketing message, pricing strategy, and more.

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3. Fast Response To Consumer Trends And Market Demand: The streamlined logistics,
especially for merchants who do "drop ship," allow businesses to respond to market and
eCommerce trends and consumer demands in a nimble manner. Merchants can also create
promotions and deals on the fly to attract customers and generate more sales.

4. Lower Cost: With the advance in eCommerce platform technologies, it has become very easy
and affordable to set up and maintain an eCommerce store with a low overhead. Merchants no
longer have to spend a large budget on TV ads or billboard, nor worry about the expense for
personnel and real estate.

5. More Opportunities To "Sell": Merchants can only provide a limited amount of information
on a product in a physical store. On the other hand, eCommerce websites allow the space to
include more information such as demo videos, reviews, and customer testimonials to help
increase conversion.

6. Personalized Messaging: eCommerce platforms give merchants the opportunity to serve up

personalized content and product recommendations to registered customers. These targeted
communications can help increase conversion by showing the most relevant content to each
visitor.

Personalization of e Commerce

7. Increased Sales with Instant Gratification: For businesses that sell digital goods,
eCommerce allows the delivery of products within seconds of making a purchase. This satisfies
consumers' need for instant gratification and helps increase sales, especially for low-cost items
that are often "impulse buys."

8. Ability to Scale Up (Or Down) Quickly and Unlimited "Shelf Space": The growth of an
online business is not limited by the availability of physical space. Even though logistics can
become an issue as one grows, it's less of a challenge compared to those for running a brick-and-
mortar store. eCommerce merchants can scale up or down their operation quickly, and take
advantage of the unlimited "shelf space," as a response to market trend and consumer demands.

9
Disadvantages of e-Commerce: Running an eCommerce business is not all rainbows and
unicorns. There are challenges unique to this business model -- knowing them will help you
navigate the choppy waters and avoid common pitfalls:

1. Lack of Personal Touch: Some consumers value the personal touch they get from visiting a
physical store and interacting with sales associates. Such personal touch is particularly important
for businesses selling high-end products as customers not only want to buy the merchandise but
also have a great experience during the process.

2. Lack of Tactile Experience: No matter how well a video is made, consumers still can't touch
and feel a product. Not to mention, it's not an easy feat to deliver a brand experience, which
could often include the sense of touch, smell, taste, and sound, through the two-dimensionality of
a screen.

3. Price and Product Comparison: With online shopping, consumers can compare many
products and find the lowest price. This forces many merchants to compete on price and reduce
their profit margin.

4. Need for Internet Access: This is pretty obvious, but don't forget that your customers do need
Internet access before they can purchase from you! Since many eCommerce platforms have
features and functionalities that require high-speed Internet access for an optimal customer
experience, there's a chance you're excluding visitors who have slow connections.

5. Credit Card Fraud: Credit card fraud is a real and growing problem for online businesses. It
can lead to chargebacks that result in the loss of revenue, penalties, and bad reputation.

6. IT Security Issues: More and more businesses and organizations have fallen prey to
malicious hackers who have stolen customer information from their database. Not only could this
have legal and financial implications but also lessen the trust customers have in the company.

7. All the Eggs in One Basket: eCommerce businesses rely heavily (or solely) on their websites.
Even just a few minutes of downtime or technology hiccups can cause a substantial loss of
revenue and customer dissatisfaction.

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8. Complexity in Taxation, Regulations, and Compliance: If an online business sells to
customers in different territories, they'll have to adhere to regulations not only in their own
states/countries but also in their customers' place of residence. This could create a lot of
complexities in accounting, compliance, and taxation.

What is E-COMMERCE
The phrase E-commerce can be defined as, commerce conducted in a digital form or on an
electronic platform, or selling or buying goods and services on the Internet 2. In the European
Initiative in Electronic Commerce E-commerce is defined as below: 3 Any form of business
transaction in which the parties interact electronically rather than by physical exchanges. It
covers mainly two types of activity; one is the electronic ordering of tangible goods, delivered
physically using traditional channels such as postal services or commercial couriers; and the
other is direct electronic commerce including the online ordering, payment and delivery of
intangible goods and services such as computer software, entertainment content or information
services on a global scale.
The key words in the definition above are: commercial transactions, organizations, individuals
and electronic exchange. It reveals the scope of electronic commerce from a jurisdiction and
functional perspective.
Electronic commerce, in private sense, is international and domestic commerce; trade and
business for both non-personal and personal usage.
The types of electronic commerce can be based either on the kinds of parties involved viz.,
businesses, consumers, governments or administrations, on the other hand commercial
activities may be the criterion for determining the kinds of business e.g., web advertisement,
electronic delivery of digital goods, delivery of goods physically which have been ordered
electronically, information services.

The parties to a contract, which has been concluded electronically, should first be able to
establish the terms on which and the type of contract they have entered into. Broadly speaking an
electronic contract can be characterized as below:4
2
Faye Fangfei Wang, Law of Electronic Commercial Transaction, 1st Ed., Routledge, London, 2010, p.5
3
European Initiative in Electronic Commerce, COM (97) 157 at I(7) available at
ftp://ftp.cordis.europa.eu/pub/esprit/docs/ecomcom.pdf
4
S.V. JogaRao, Computer Contracts & Information Technology Law, Vol.1, 2nd Ed., Wadhwa and Company,
Nagpur, 2005, p.1226

11
  Business-to-Business (B2B)
 Business-to-Consumer (B2C)
 Consumer-to-Business (C2B)
 Consumer-to-Consumer (C2C)

 A/G2A/G or B/C [popularly known as electronic governance it involves the interaction between
administration/governments (local, regional or national) with other administrations or with
businesses and consumers.]

1 Business to Business (B2B): A B2B cycle involves electronic transactions among and
between businesses. This is a technology which has been in practice for many years generally in
the form of Electronic Data Interchange (EDI) or electronic transfer of funds. B2B transactions
have seen a phenomenal growth due to sharp increase in the internet penetration and have
become faster growing segment even within the e-commerce environment.

This kind of a business arrangement is seen in the case of various FMCG (Fast moving consumer
goods) companies who relate to their franchisees through the internet and a varied range of
transactions including reports of stock, sales, purchase orders and other shipping details can be
transacted through this form.

2 Business-to-Consumer (B2C): In a typical B2C e-commerce, businesses sell directly to

consumers. Websites such as homeshop18.com, flipkart.com, ebay.com, are the most common
examples of such B2C e-commerce cycle. In addition to these, even the traditional businesses
have also established virtual stores in order to cater to ever growing demands.

The major advantages of such e-commerce sites and companies are the availability of physical
space, availability of returns and availability of customer service in physical matters. The
organization would directly be in touch with its customers. As middlemen are eliminated, price
of goods will be less resulting in some benefit to customers.

3 Consumer-to-Business (C2B): This generally involves individuals selling to business

concerned and may be selling of a particular service or product that the consumer intends to sell.

This may be in the form of catalogues, auctions, etc. very good examples of such trade are
websites for travel arrangements.

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4 Consumer-to-Consumer (C2C): The C2C e-commerce category involves business
transactions among individuals using the Internet and web technologies. Here, the commercial
activities take place between two individuals. One of the very classic examples is the bids that
are registered with websites like bazee.com, olx.com for sale of products or possession of
individual wanting to sell through the net.

5 Governmental and Non-Business: The e-commerce applications are also found in the
Government and non-business sectors. The Revenue departments, the police enforcement, the
Railways, the Defense departments, Universities, and other non-profit, non-government
voluntary organizations are some of the set ups using technology. And calling of tenders for
assigning public work called e-procurement.

WHAT IS E-CONTRACT?
After looking at bird’s view of e-commerce, now it is time for understanding what is the
meaning of e-contract? There is no hard and fast definition of e-contract. The traditional
definition of contract cannot be applied to e-contract ‘, because realm of e-contract is much
bigger than the realm of traditional mode of contract. To put it simply, e-contract is any
agreement which is entered on internet by competent parties, with lawful consideration, free
consent, without any mala fide intention and to create legal relationship.

E-contract can be defined in following words:5E-contract is a kind of contract formed by

negotiation of two or more individuals through the use electronic means, such as e-mail, the
interaction of an individual with an electronic agent, such as a computer program, or the
interaction of at least two electronic agents that are programmed to recognize the existence of a
contract.

As it is already stated that there is no exhaustive definition as to e-contract and most of times
only generic definitions are available. E-contracts are also referred as cyber-contract or digital
contract or online contracts ‘.

5
US Legal Definitions, available at http://definitions.uslegal.com/e/e-contract/ last visited on 28 November, 2012

13
Etymologically one can give as many as definitions for e-contract, but there is no border line for
it meaning. In broader sense, it can be summed up as contracts made using computers, either via
e-mail or the Internet, or that involve computer related products, such as databases and software.6

1. KINDS OF E-CONTRACT: There are two ways through which commercial contracts can be
entered electronically. A common and popular method is through the exchange of electronic mail
e-mail. The other method of contracting is using the World Wide Web or website. Further the
website based is divided into following kinds:
 Click Wrap
 Browse Wrap and
 Shrink Wrap

1.1. E-MAIL CONTRACT: A contract can be entered into and concluded following the
exchange of a number of e-mails between the parties. Here the e-mails serve the same purpose as
normal letters, do had a contract been negotiated through letters written by both parties. The fact
that a contract has been negotiated electronically will not raise any specific legal or contractual
consideration sui generis to the type although there may be evidential considerations raised
dependent on the existing legislation and if there are any formal requirements for a written
signed contract.

1.2. CONTRACT THROUGH WEBSITES: Normally, a vendor would provide a display

of products on his website and indicates cost of such product. A customer can scroll through the
website previewing the items or products on offer, click on the item for further information and
if interested in the purchase, can place an order by filling in an order form and clicking Submit
‘or I Agree ‘or I Accept ‘or something similar button. Shrink wrap, 7click wrap and browse wrap
are common types of agreements used in electronic commerce.

E-GOVERNANCE

The e-governance predominantly deals with delivery of government services to its citizens,
exchange of information and integration of various systems and services using information and

6
Available at, http://highered.mcgraw-hill.com/sites/0073524948 /student_view0 /glossary.html last visited on 28
November, 2012
7
The clinging transparent plastic film that is used to shrink-wrap the Compact Disks.

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communication technologies8. This e-governance has different parameters. It could be
government to government (G2G) or government to citizens (G2C) or government to business
(G2B) or government to employees (G2E)9.

The basic purpose of e-governance is to enhance efficiency in administration and transparency in

operations. This e-governance has two-way communications. In Indian context, a recent
conference on e-governance, Indian government has conceptualized open government for its
citizens10. This theme of open government consisted of three components viz. accessibility,
participation and transparency. As mentioned earlier chapters, e-governance gives level playing
field to all interested participants in allotment of government contracts. Thus, e-governance
removes arbitrariness from the administrative set-up. Further, it strengthens the core concept of
our Constitution that is welfare state by giving an easy opportunity to people to participate in
administrative proceedings11. The Second Administrative Reforms Committee set up by
Government of India has submitted a report that by 2017 there should be paperless offices in this
country12.

Government of India started e-governance under National e-Governance Plan (NeGP) initiated
by Department of Administrative Reforms & Public Grievances and Department of Electronics
and Information Technology in 2006 with objective of making services accessible to citizens and
promoting efficiency and transparency13.

8
http://en.wikipedia.org/wiki/E-Governance ( as visited on 08-09-2013)
9
Ibid
10
http://www.nceg.gov.in/16_nceg_proceedings.pdf (as last visited on 08-09-2013)
11
Ibid
12
Ibid
13
Ibid

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 CONSUMER PROTECTION ACT, 2020

INTRODUCTION

The first consumer protection legislation i.e. Consumer protection act, 1986 had many flaws in it
and lacked at various aspects of consumer protection. In order to rectify the flaws, the
Government introduced the Consumer protection act, 2019 in the official gazette on 9th of
August, 2019 which came into force on 20th of July, 2020.

Over the last 20 years, the economy has seen a huge increase with the introduction of various e-
commerce platforms and advent online marketplaces for consumers starting from the early 90’s.
The average spending of the Indian consumer has increased over the years which have led to the
rise of various e-commerce platforms over the years.

The Consumer Protection Act, 2020 (CPA) has been introduced to broaden the definition of the
consumer and to provide them with various powers by recognizing online transactions and by
providing them to institute a complaint from any place whether it residence or work.

The central government after repealing the older act i.e. Consumer Protection Act, 1986 has
introduced various new provisions under the act which pertain to Consumer Disputes Redressal
Forum, mediation, Consumer Protection Councils, product liability, punishment for
manufacturing, selling, distributing spurious or adulterated goods and products.

The new CPA has been introduced with new rules that will ensure that there is smooth
functioning of the new CPA. The new rules cover all e-commerce entities which are operating
within India as well as out of India. The new rules have come into force on the 20th of July,
2020.The e-commerce industries have seen a high boom during the pandemic as the markets
were being easily accessed by everyone through their Smartphone’s and Laptop’s. The new rules
were introduced with the aim of stopping unethical business practices and unfair trade practices.

SCOPE OF THE RULES

1. These rules apply to all goods and services that are provided through an electronic
platform or through digital network.

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 2. All representations of e-commerce, including marketplace and inventory market
representations of e-commerce.
3. All type of e-commerce transactions retail, including that of single brand retailers or
single brand retailers in single or multiple formats.
4. All forms of unfair trade practices across all representations of e-commerce.

APPLICABILITY OF THE RULES

Rules set out that they apply to: (a) all goods and services available over the digital or electronic
network including digital products; (b) all models of e-commerce entity14 such as marketplace e-
commerce entity15 and inventory e-commerce entity16; (c) all e-commerce retail like multi-
channel single brand retailers and single brand retailers in single or multiple formats; and (d) all
forms of unfair trade practices across all models of e-commerce. The Rules do not apply to any
activity of a natural person carried out in a personal capacity not being part of any ‘professional
or commercial activity' undertaken on a regular or systematic basis. Further, the Rules have been
expressly made applicable to an e-commerce entity which is not established in India but
systematically offers goods and services to consumers in India. This aspect, however, leaves
room for interpretation as to what would mean by ‘systematically'. For example, a foreign
website selling goods with an option to ship its product around the world, including in India, but
does not specifically or categorically offer the product to consumers in India, would such website
also need to comply with the provisions of the Rules.

BENEFIT TO THE CONSUMERS

The new act helps the consumers as now both online as well as offline transactions are
recognized rather than only offline transactions. These rules are introduced in order to safeguard
the rights of the consumers and providing them with proper redressal in the case of consumer
protection.

14
The Rules define ‘e-commerce entity' as “any person who owns, operates or manages digital or electronic facility
or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a
marketplace e-commerce entity”.
15
The Rules define ‘marketplace e-commerce entity' as “an e-commerce entity which provides an information
technology platform on a digital or electronic network to facilitate transactions between buyers and sellers”.
16
The Rules define ‘inventory e-commerce entity' as “an e-commerce entity which owns the inventory of goods or
services and sells such goods or services directly to the consumers and shall include single brand retailers and multi-
channel single brand retailers”.

17
The new act contains provisions that help the consumers to file a complaint from anywhere
whether it is the place of residence or where the person works for gain. This has brought a drastic
change in the provisions of the earlier Act, where the complaint could be only initiated from the
place where the transaction took place.

CENTRAL CONSUMER PROTECTION AUTHORITY

The Act contains rules for the establishment of a Central agency i.e. Central Consumer
Protection Authority (CCPA) that will be responsible for consumer protection by safeguarding
and protecting the rights of the consumers.

The CCPA is said to have the power of to conduct investigations into consumer rights violation
and to register complaints in order to recall of unsafe goods and services as well as discontinue
unfair trade practices and misleading advertisements and also institute complaints and prosecute
the violators of consumer rights.

The act will also enable the CCPA to impose penalties on manufacturers, endorsers and
publishers of misleading advertisements. But, this is yet to be notified in the coming gazette and
the provisions which will lead to the establishment of the CCPA in order to stop unfair trade
practices in e-commerce transactions.

DUTIES OF E-COMMERCE ENTITIES

(1) The Act provides for certain duties that need to be performed by the e-commerce entities.
The e-commerce entities need to display the following things on its platform in a clear
and understandable manner to its users:-
a. The legal name under which the entity is registered;
b. The main address of its headquarters and all its branches;
c. Name and the details of the website; and
d. Contact details for customer care and the grievance officer.

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 (2) No e- commerce entity shall use unfair trade practices on its platform or in course of
business.

(3) Every e-commerce entity is required to establish adequate grievance redressal mechanism
in respect to the average number of complaints that are received by the entity in India,
and shall appoint a grievance officer for the redressal of the same, and the details of the
officer has to be displayed on the platform itself. The e-commerce will ensure that the
grievance officer will acknowledge every consumer complaint within 48 hours and shall
redress the same within one month.

(4) Mention the name and details of any importer from whom it has purchased such goods or
services where the entity is offering goods and services which are imported.

(5) Every e-commerce entity shall ensure that the best effort basis to become a partner in the
convergence process of the National Consumer Helpline of the Central Government is
done.

(6) In case where the consumer cancels the purchase, no e-commerce entity shall impose a
cancellation charge on the consumer unless the same is being borne on the entity itself.

(7) Every e-commerce entity is required to affect all payments towards accepted refund
requests of the consumers as prescribed by the Reserve Bank of India or any other
competent authority under any law.

(8) No e-commerce entity shall manipulate prices of goods or services offered on its platform
in order to gain unreasonable profit or discriminate between consumers on the basis of
same class or make any arbitrary classification which may affect the rights of the
consumers under the Act.

LIABILITIES OF MARKETPLACE E-COMMERCE ENTITIES

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There are certain liabilities that have been also propounded on the e-commerce entities. All the e-
commerce entities need to make sure that the product that is being displayed upon their platforms
matches the exact description, nature, features, quality, and purpose of the product in nature.

Apart from the abovementioned, the e-commerce entities are obliged to provide the following
information on their platforms in easy and accessible manner: -

1. Every e-commerce entity is required to include in its terms and conditions specifically
governing the relationship with sellers on their platform
2. Every e-commerce entity is required to maintain a record of its sellers which will include
the details of the sellers, including name of the business.
3. Every e-commerce entity is required to provide for a unique number for each complaint
ticket for tracking the status of the complaint.
4. Every e-commerce entity is required to provide for information regarding its payment
methods.
5. If the entity gives any differentiated treatment between goods or services or sellers of
same category, it should be mentioned in the terms and conditions.

Furthermore, the marketplace e-commerce entity is required to maintain a record of all relevant
information allowing for identification of all sellers who have repeatedly offered goods or
services that have been removed or access to which has been disabled under Copyright Act,
Trademark Act or Information Technology Act.

DUTIES OF SELLERS ON MARKETPLACE

The rules were introduced so that there is no violation of the consumer rights, in order to ensure
that the rules also provide for several duties that are to be followed by the seller which are listed
below

 The seller is required not to adopt for unfair trade practices such a bribing the customer to
write reviews that do not match the quality of the product.

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 The seller cannot disagree to take back its goods or services that it has provided to the
consumer if the goods or services are found to be defective, deficient, or spurious or if
such goods or services are delivered late from the actual stated delivery schedule on the
platform.
 The seller needs to form a written contract with the e-commerce entity on whose platform
it will be dealing with the products.
 The seller needs to ensure that the advertisement for the product matches the exact
description, features, quality, and purpose of the product as in its true nature.
 The seller needs to provide the e-commerce entity with details regarding the name of the
business, website, address of headquarters and its branches, GST details and its Pan
details, phone number and its email address, and lastly with its customer care number.

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CONCLUSION

In the end I would like to conclude with the statement, that the new ACT has not only uplifted
the old ACT but it has taken it up a notch for the consumer. The Consumer Protection Rules,
2020 aims at providing transparency in provision of information and disclosure by the e-
commerce platforms to the consumers. They also aim at providing a safer and a consumer free
environment which stops unfair trade practices from taking place and strengthen the consumer
by providing them with rights like never before. The rules not only cover the e-commerce
entities that operate in India, but now it also covers the foreign e-commerce entities under Rule
4(1) (a). The popular phrase 'buyer beware' will soon be replaced to 'seller beware' or
'manufacturer beware' in case they are found in contravention of the Act considering the
protection that is being offered to the consumers by the implementation of the new ACT. The
timing for the implementation is also being considered perfect as the global markets are
becoming more and more consumer-centric.

It can be said that Rules aim to bring transparency and accountability in provision of information
and disclosure by e-commerce platforms to consumers. Rules also seek to put a check and
provide for disclosure on the practice of preferential treatment being accorded to some sellers
reducing possibility of unfair trade practices by large sellers. With increase in ecommerce
activity especially in present times, the Rules are a step to address consumer grievances and
prescribe certain best practices for benefit of consumers.

However, there are many grey areas as well as discussed above. With several obligations to
comply with, it might have an adverse impact on small businesses operating as an e-commerce
entity. Given that non-compliance of the Rules would have penal provisions as set out in the Act,
it could be an excessive deterrent for small business. Further, these Rules neither deal with
consumer data protection nor storage of confidential information especially for ecommerce
entities operating as payment aggregators. Aspects relating to enforceability of the provisions of
the Rules to the foreign business also remain to be clarified given that handling a dispute
involving a foreign entity may have territorial and jurisdictional constraints. A pre-defined
procedure for resolving these types of disputes may be required. It remains to be seen if the
government comes out with any clarification and allow for a bit more balance between consumer
protection and commercial interests.

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