The Indian Consumer Protection Act (CPA), enacted in 2019, aims to safeguard consumer rights and interests in India, promoting fair trade practices and accountability in consumer transactions. The E-commerce rules, introduced under the CPA in 2020, regulate online platforms, setting guidelines for transparency, consumer rights, and ensuring the responsibility of intermediaries like e-commerce platforms.

Key Features of the Indian Consumer Protection Act

The Act introduces multiple provisions to protect consumers in the marketplace, whether online or offline:

Consumer Rights

• Right to Safety: Protection from hazardous goods and services.

• Right to Information: Transparent information about products and services.

• Right to Choice: Ensuring variety and alternatives in the market.

• Right to Redressal: Access to effective grievance redressal mechanisms.

• Right to Consumer Education: Awareness of consumer rights and remedies.

Consumer Dispute Redressal Forums

The Act establishes a three-tier dispute resolution mechanism:

• District Forum: Handles consumer complaints with a monetary value up to ₹1 crore.

• State Commission: Deals with complaints valued between ₹1 crore and ₹10 crore.

• National Commission: For complaints exceeding ₹10 crore.

Penalties for False Advertising

The Act enforces strict penalties for false or misleading advertisements. Brands or service providers found guilty of deceptive marketing can face penalties and bans on advertising.

E-Commerce Rules and Their Implications

The E-commerce rules under the Consumer Protection (E-Commerce) Rules, 2020, impose stricter obligations on online platforms to enhance transparency, protect consumers, and hold platforms accountable for their actions.

Clear Disclosure of Information

E-commerce platforms must provide clear details about their seller’s identity, product information, pricing, and return/refund policies. Consumers must have access to accurate information regarding the products they purchase and the businesses they interact with.

• Example: An online clothing retailer must clearly display size charts, material information, and refund policies to comply with these rules.

Liability for Misleading Products

E-commerce platforms are held responsible if the products or services they offer are found to be defective or misleading, even if the third-party sellers are at fault. Platforms must take prompt corrective actions, including removing misleading listings.

• Example: A consumer purchases a mobile phone with a defect through an online platform. The platform can be held liable if it failed to act upon consumer complaints in a timely manner.

No Fake Reviews

Platforms must ensure that customer reviews are genuine. Fake reviews or manipulated ratings are prohibited, and e-commerce platforms are required to implement measures to detect and eliminate fraudulent reviews.

• Example: An online electronics store cannot allow sellers to post fake positive reviews to boost the sales of their products.

Intermediary Liabilities in India

Under the Indian Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, intermediaries like social media platforms, online marketplaces, and e-commerce platforms are expected to comply with specific liabilities:

Due Diligence Requirement

Intermediaries are required to observe due diligence in hosting third-party content. They must have mechanisms in place to remove harmful or illegal content once brought to their notice. Failure to do so can lead to liability for the content.

• Example: A social media platform failing to take down hate speech after it has been reported may face penalties for non-compliance.

Intermediary Safe Harbor

Under Section 79 of the IT Act, intermediaries are generally not liable for user-generated content as long as they act as neutral platforms and comply with due diligence requirements. However, if they are made aware of illegal content and fail to act, they can lose this safe harbour protection.

Specific E-commerce Platform Responsibilities

Platforms are expected to ensure that products are not counterfeit, misrepresented, or involved in any illegal trade. They are required to verify the credentials of sellers to avoid fraudulent activities.

• Example: If a seller on an e-commerce platform is found selling counterfeit goods, the platform must act to remove the listing and prevent further violations.

The Indian Consumer Protection Act and the accompanying E-commerce rules set clear guidelines for both consumers and businesses in the digital age. The act ensures that consumers are protected from unfair practices, while the rules provide an effective framework to regulate e-commerce platforms and intermediaries. As the digital economy grows, these regulations will play a crucial role in fostering consumer trust and ensuring responsible business practices across online platforms in India.

Frequently Answered Questions

What should someone do if they receive a faulty product from an online store?

Under the Indian Consumer Protection Act, consumers have the right to redressal. If a faulty product is received, the consumer should:

• Contact the seller or the e-commerce platform.
• Request a refund, replacement, or repair.
• If no resolution is received, a complaint can be filed with the consumer forum or CCPA (Central Consumer Protection Authority).

Are e-commerce platforms responsible for products sold by third-party sellers?

Yes, e-commerce platforms are responsible for the products sold by third-party sellers. If counterfeit, faulty, or misleading products are listed, the platform must take action to remove the listing and ensure consumer complaints are resolved.

Can consumers return a product if they simply change their mind?

Under the Consumer Protection Act, products can be returned if they are defective, misleading, or do not match the advertised description. However, if a consumer changes their mind without these issues, the return policy of the platform or seller will apply. Many platforms do offer free returns within a specified period.

Can an online platform be held accountable if a customer is scammed by a seller?

Yes, e-commerce platforms can be held accountable. They are responsible for ensuring the sellers on their platform comply with the law. If a consumer is scammed, the platform must act by providing a refund and taking appropriate action against the seller, including removing them from the platform.

What happens if an e-commerce platform fails to act on a consumer complaint?

If an e-commerce platform fails to act on a consumer complaint or neglects its responsibility to correct misleading products, it can face significant legal and financial consequences, including fines and removal from the market.