E-COMMERCE & Consumer protection

BY KIRTI BIKRAM
ASSISTANT PROFESSOR, SLS-P
Jurisdiction under the Information
Technology Act, 2000

 The provisions of this Act shall apply also to any offence or contravention committed
outside India by any person irrespective of his nationality

 Further this Act shall apply to an offence or contravention committed outside India by
any person if the act or conduct constituting the offence or contravention involves a
computer, computer system or computer network located in India.

 It is the legislative function of the Government to enact laws and judicial and/or
administrative function to enforce those laws. Thus, the principles of jurisdiction followed
by a State must not exceed the limits which international law places upon its jurisdiction.
Meaning of Consumer Protection

 consumer protection means the protection of consumers from an assortment of unfair

trade practices.

 The Court in Raghubir Singh v. Thakurain Sukhraj Kuar explained that the rationale
behind such protection is to avoid consumers’ exploitation at the end of business
community and to hold back various business malpractices
CONSUMER PROTECTION ISSUES

 E-Commerce refers to a mechanism that mediates transactions to sell goods

and services through electronic exchange.
 OCED-1999 guidelines recognised, three essential dimensions of consumer
protection in e-commerce. (primarily for cross-border transactions)
 All consumers need to have access to e-commerce.
 Transparent and effective consumer protection mechanisms is to check fraudulent,
misleading, and unfair practices online - to build consumer trust/confidence in e-
commerce
 stakeholders-government, businesses, consumers, and their representatives- must
pay close attention to creating effective redress system.
 the OECD revised its 1999 recommendations for consumer protection in 2016
 The 2016-guidelines aim to address the growing challenges of e-consumers’ protection by
stimulating innovation and competition, including non-monetary transactions, digital content
products, consumers-to-consumers (C2C) transactions, mobile devices, privacy and security
risks, payment protection and product safety.
 The common issues related to e-commerce are data privacy and security, product quality,
uncertain delivery, no/low scope of replacement, the jurisdiction of filing complaints, and
inconceivable terms and conditions
 “Country of origin” of the product is a significant issue in e-commerce, particularly in cross-
border transactions
 CONSUMER PROTECTION ACT

 India’s essential demonetisation policy-2016 has pushed for online transaction security and
consumer protection in e-commerce activities – digital payments

 Consumer protection in e-commerce activities – inadequacy of CPA 1986

The Consumer Protection Act, 2019 replaced the Consumer Protection Act 1986 and
became effective with effect from 20 July 2020,19 while on 7 July 2020, the Consumer
Protection (E-commerce) Rules, 2020 came into force to address the e-commerce
challenges
CPA 2019

 The new Act, 2020 brings fundamental changes regarding its scope of application,
penalty and governance; and envisages CCPA and vests regulating and controlling
powers

 The Act, 2019 applies to buying or selling goods or services over the digital or
electronic network, including digital products and to a person who provides
technologies enabling a product seller to engage in advertising/selling goods/services
to a consumer

 The Act also covers online market places or online auction sites
Consumer Protection (E-Commerce) Rules, 2020

 Aims to prevent unfair trade practices and protect consumers’ interests and rights in e-
commerce
 The Rules apply to:
 Both products and services acquired or sold through automated or electronic networks;
 All models of e-commerce retail;
 All the e-commerce entities, whether they have inventory or market place model. The
inventory-based model includes an inventory of goods and services owned by an e-
commerce entity and directly sold to consumers [Rule 3(1) f]. In the marketplace model, an e-
commerce entity has an information infrastructure platform on a digital and electronic
network that facilitates the consumer and the seller. [Rule 3(1)g];
 All aspects of unfair trading practise in all models of e-commerce; and
 An e-commerce entity is offering goods or services to consumers in India but not established
in India.
 Duties of E-commerce Entities
display basic information such as their name, contact details and address prominently on the
platform: establish consumer grievance redressal mechanism etc
 Liabilities of Marketplace Entities
reiterating the due diligence requirements on intermediaries; nsuring that descriptions of goods
and services are accurate and correspond directly with the features of such goods and
services through an undertaking by the seller;
 Duties of Sellers using Marketplace Entities
Sellers offering goods or services through Marketplace Entities must provide specific
information to Marketplace Entities, including seller entity details, price and breakup price,
relevant details about the goods or services offered for sale by the seller including country of
origin, importer and manufacturer details, delivery details, relevant guarantees or warranties
applicable, and all other mandatory notices and information required by applicable laws.
 Liabilities of Inventory Entities
Similar to the sellers on Marketplace Entities, Inventory Entities are also required to provide
specific information such as price and breakup price, country of origin of imported goods,
delivery details, applicable guarantees or warranties, and all other mandatory notices and
information. Inventory Entities must also refrain from adopting unfair trade practices, false
representations, and refusing refunds as required under the CPA 2019.
 Contraventions
The provisions of CPA 2019 will apply to any violations of the E-Commerce Rules, and in such
cases, e-commerce entities may be required to comply with relevant sanctions and directions
by the authorities. Non-compliance with such directions may result in fines or imprisonment
The CPA 2019 introduces the concept of product seller which includes entities that market,
prepare, maintain, 'place a product for commercial purpose' and provide services in respect of
such products. Such entities may be held liable for harm caused to a consumer.
 Conclusion

 The IT Act has been enacted with an objective of facilitating the conduct of e-commerce
transactions and to address and encounter all the challenges that may hamper the conduct
of e-commerce transactions but the provisions of IT Act, 2000 are not primarily providing to
address the issues of consumer protection in e-commerce transactions, yet it has got a few
provisions which reflects the consumer centric approach to protect consumers’ right in e-
commerce.

 Consumer rights protection is paramount in the growth of e-commerce, the new regulations
strengthen the grievance redress mechanism of online consumers, ensuring their trust-
building ability, safety, and security.