LEGAL REGULATORY ISSUES AND REGULATIONS IN E-COMMERCE.

1. LEGAL REGULATORY
ISSUES IN
E- COMMERCE.
CYBER LAW.
MUNAZZA
1ST YEAR BA.LLB,
2ND SEMESTER [2022-23],
SCHOOL OF LAW,
UNIVERSITY OF MYSORE.

2. INDEX.
• INTRODUCTION.
• DEFINITION OF E-COMMERCE.
• RULES & REGULATIONS OF E-COMMERCE IN INDIA.
• LEGAL ISSUES OF E-COMMERCE.
• WAY FORWARD/ FUTURE SCOPE.
• CONCLUSION.
• BIBLIOGRAPHY.
• WEBLIOGRAPHY.

3. INTRODUCTION:
• E- COMMERCE IS A METHOD OF BUYING AND SELLING OF
GOODS & SERVICES ONLINE.
• E- COMMERCE IS A TYPE OF COMMERCIAL TRANSACTION IN
WHICH PARTICIPANTS COMMUNICATE ELECTRONICALLY
RATHER THAN THROUGH PHYSICAL EXCHANGES OR DIRECT
PHYSICAL TOUCH, AS IN CASE WITH MORE TRADITIONAL
COMMERCIAL PROCEDURES.
• EX: SOCIAL MEDIA ONLINE SALES, AMAZON, AFFILIATE
MARKETING etc.

4. DEFINITION:
• ACCORDING TO INFORMATION TECHNOLOGY ACT, 2000, ‘AN
ACT TO PROVIDE LEGAL RECOGNITION FOR TRANSACTIONS
CARRIED OUT BY MEANS OF ELECTRONIC DATA INTERCHANGE
AND OTHER MEANS OF ELECTRONIC COMMUNICATION’,
COMMONLY REFERRED AS ‘ELECTRONIC COMMERCE’.
• THE USE OF ELECTRONIC COMMUNICATIONS AND DIGITAL
INFORMATION PROCESSING TECHNOLOGY IN BUSINESS
TRANSACTIONS TO CREATE, TRANSFORM, AND REDEFINE
RELATIONSHIPS FOR VALUE CREATION BETWEEN OR AMONG
ORGANIZATIONS AND BETWEEN ORGANIZATIONS AND
INDIVIDUALS.

5. REGULATIONS OF E-COMMERCE IN
INDIA:
• ACCORDING TO SECTION 84 (A) OF IT ACT, 2000, THE CENTRAL
GOVERNMENT REGULATES E-COMMERCE IN INDIA.
• E-COMMERCE ENTITIES MUST COMPLY WITH THE INFORMATION
TECHNOLOGY (REASONABLE SECURITY PRACTICES AND
PROCEDURES AND SENSITIVE PERSONAL DATA OR INFORMATION)
RULES, 2011.
• E-RECORDS AND E-SIGNATURE ARE LEGALLY RECOGNISED UNDER
IT ACT.
• THE MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY
[MeitY].
• CONSUMER PROTECTION [E-COMMERCE]RULES, 2020.

6. LEGAL ISSUES OF E-COMMERCE:
1. INTERNATIONAL CROSS-BORDER.
2. JURISDICTIONAL ISSUE.
3. PRIVACY & DATA PROTECTION.
5. CONTRACTS.
6. INTELLECTUAL PROPERTY RIGHTS.
7. ONLINE ADVERTISEMENTS.
8. ISSUES IN CONSUMER PROTECTION.
9. LIABILITY.
10. IDENTITY MANAGEMENT.
4.TAXATION.

7. 01. INTERNATIONAL CROSS-
BORDER E-COMMERCE ISSUE:
• BUYERS AND SELLERS ARE LOCATED IN DIFFERENT COUNTRIES,
NOT RULED BY SAME JURISDICTION, USE OF DIFFERENT
COUNTRIES, DIFFERENT LANGUAGES.
• CHARACTERISED BY ONLINE ORDERING, ONLINE PAYMENT-
CROSS BORDER TRANSACTION OR SHIPMENTS..
• RISKS IN MARKET ENTRY, LAWS, LOGISTICS, LOCALIZATION,
LOCAL TAXATION, FRAUD, PAYMENT, LACK OF STANDARDIZED
AND HARMONIZED PROCEDURES.

8. 02. JURISDICTIONAL ISSUE:
• JURISDICTION – BOUNDRY/LIMITS.
• THE EXERCISE OF JURISDICTION ACROSS THE NATIONAL BORDERS IS GOVERNED BY TREATIES
BETWEEN THE COUNTRIES.
• ENFORCEMENT OF RIGHTS OF THE PARTIES.
• DISPUTE SETTLEMENT.

9. 03. PRIVACY & DATA PROTECTION:
• USE OF INNOVATIVE TECHNOLOGIES TO OBTAIN PERSONAL
AND CONFIDENTIAL INFORMATION ABOUT INDIVIDUALS AND
ORGANIZATIONS.
• DISSEMINATION SENSITIVE AND CONFIDENTIAL MEDICAL,
FINANCIAL etc.
• TRACKING PERSONAL ACTIVITIES OF CUSTOMERS.
• SPAM/UNSOLICITED EMAILS.
• UNREASONABLE CHECK AND SCRUNITY.

10. 04. TAXATION:
• DIFFICULTIES IN TAXING E-COMMERCE TRANSACTIONS.
• DOUBLE TAXATION.
• IDENTIFICATION OF PERMANENT EXISTENCE OF FIRM.
• TRACING COMMENCING AND END-POINT TRANSACTION.
• LACK OF DOCUMENTATION.
• ‘DIGITAL INDIA’ – TRADEMARK ISSUE.

11. 05. CONTRACTS:
• CAPACITY OF CUSTOMER.
• WHEN OFFER IS MADE?
• WHEN ACCEPTANCE IS MADE?
• WHEN CONTRACT IS FORMED?
• E- SIGNATURE.
• CONFLICTS OF JURISDICTION.
• IDENTITY RECOGNITION IN E-CONTRACT.

12. 06. INTELLECTUAL PROPERTY
RIGHTS:
• INTERNET IS BOUNDLESS AND UNREGULATED MEDIUM IN E-BUSINESS.
• ORIGINALITY.
• SUBJECT MATTER OF PROTECTION [PATENTS].
• UNAUTHORIZED HYPERLINKING AND META TAGGING.
• PROTECTION AGAINST UNFAIR COMPETITION.

13. 07. ONLINE ADVERTISEMENT:
• WEBSITES MAY BE SUBJECT TO FALSE DESIGNATIONS, ORIGIN,
MISLEADING, DESCRIPTION OF FACT THAT ARE LIKELY TO
CAUSE CONFUSION OR MISREPRESENT THE NATURE,
CHARACTERISTICS, QUALITY OR GEOGRAPHIC ORIGIN OF THE
GOODS OR SERVICES OFFERED IN AN ONLINE
ADVERTISEMENT.
• SUBJECT TO DIFFERENT INTERPRETATIONS BY CONSUMERS IN
DIFFERENT JURISDICTIONS AND FAKE ADVERTISEMENTS.
• SHOULD BE LEGAL, DECENT, HONEST AND TRUTHFUL.

14. 08. CONSUMER PROTECTION:
• IMPORTANT PRINCIPLE TO BE UPHELD.
• UNFAIR COMMERCIAL PRACTICES.
• UNFAIR CONTRACT TERMS.
• ONLINE PAYMENT SECURITY.
• CONSUMER EDUCATION.
• LAWS AND ENFORCEMENT.
• GOOD BUSINESS PRACTISES.
• DISPUTE RESOLUTION & REDRESSAL.
• CONSUMER PROTECTION ACT ON E-COMMERCE, 2020.
• UNCTAD [UNITED NATIONS CONFERENCE ON TRADE AND
DEVELOPMENT].
• OECD [ORGANIZATION FOR ECONOMIC CO-OPERATION AND
DEVELOPMENT].

15. 09. E-COMMERCE LIABILITY:
• HOLDING OF AN E-COMMERCE RETAILER RESPONSIBLE FOR
PRODUCTS SOLD ON ITS WEBSITE, EVEN THOSE SOLD BY THIRD
PARTY VENDORS.
• (1) CONTRACTUAL – HARMLESS AGREEMENT [RISK TAKEN BY
BOTH PARTIES]. A PERSON CAN SUE FOR BREACH OF CONTRACT
UNDER INDIAN CONTRACT ACT, 1872 OR AWARDED DAMAGES
UNDER SECTION 79 OF INFORMATION TECHNOLOGY ACT, 2000.
• (2) STATUTORY – HELD RESPONSIBLE FOR A SPECIFIC ACTION OR
OMISSION.
• (3) TORTUOUS – BREACH OF DUTY REDRESSABLE BY
UNLIQUIDATED DAMAGES.
• (4) PRODUCT – ADDRESS ECONOMIC LOSS AND DAMAGE OF
PRODUCT.

16. 10. IDENTITY MANAGEMENT:
• IDENTITY- SET OF ATTRIBUTES ASSOCIATED TO A PERSON.
• DIGITAL IDENTITY – INFORMATION, COMPROMISING A SET OF
ATTRIBUTES USED BY THE COMPUTER SYSTEMS TO RECOGNIZE THE
ENTITY.
• IT IS WAY TO PROVE THE TRUST OF INDIVIDUALS AND BUSINESS.
• MORE RELIABLE A DIGITAL IDENTITY IS, MORE COMPLEX IS THE
TRANSACTION.
• FRAUD, IDENTITY THEFT, FICTITIOUS IDENTITY,DIFFICULTY IN
AUTHENTICATION.
• RELIABILITY OF PROOF – ‘TRUST IS THE BELIEF THAT SOMETHING IS
RELIABLE’.

17. WAY FORWARD:
• THE NEW AND RAPID EXPANSION OF CROSS-BORDER OF THE E-COMMERCE IS IMPACTING
ALL COUNTRIES AND JURISDICTIONS, SO ITS MANAGEMENT NEEDS A GLOBALLY INNOVATIVE,
INCLUSIVE, STRATEGIC AND COLLABORATIVE APPROACH.
• IT IS IMPERATIVE THAT THE GOVERNMENTS AND THE PRIVATE SECTOR ENSURE THAT THE
POTENTIAL BENEFITS ARE REALIZED BY WORKING IN PARTNERSHIP TO ENSURE THAT
FACILITATION OF LEGITIMATE CROSS-BORDER E-COMMERCE TRADE, FAIR AND EFFICIENT
REVENUE COLLECTION AND COMMUNITY PROTECTION.

18. CONCLUSION:
• THE CONSTANT DEVELOPMENT OF LAWS, RULES AND
REGULATIONS WILL MAKE THE E-COMMERCE LEGAL
DIFFICULTIES MARKET PLACE A PLEASANT EXPERIENCE
FOR CUSTOMERS. THIS WILL SECURE THEIR
DEVELOPMENT AND HIGHER INVESTMENTS.
• EFFECTIVE RISK MANAGEMENT STRATEGIES PAIRED WITH
CORRECT LEGAL DOCUMENTATION WOULD HELP E-
COMMERCE ENTERPRISES.
• ‘THOUGH THE INTERNET IS A GOLDMINE ,
WITHOUT ADEQUATE LEGAL PROTECTION IT
COULD BECOME A LANDMINE.’

19. BIBLIOGRAPHY/REFERENCE:
• AASHIT SHAH AND PARVEEN NAGREE, ‘LEGAL ISSUES IN E-COMMERCE’, NISHITH DESAI ASSOCIATES.
• DIDAR SINGH, ‘ELECTRONIC COMMERCE: ISSUES FOR THE SOUTH’, TRADE RELATED AGENDA, DEVELOPMENT AND EQUITY,
WORKING PAPER, SOUTH CENTRE, OCTOBER 1999. Pt. 4.
• FAROOQ AHMED MIR, ‘EMERGING LEGAL ISSUES OF E-COMMERCE IN INDIA’, INTERNATIONAL JOURNAL OF ELECTRONIC
COMMERCE STUDIES.
• NARENDRA KUMAR, ‘LEGAL ISSUES PERTAINING TO E-COMMERCE’, ENTERSLICE.
• PSA LEGAL COUNSELLORS, ‘LEGAL ISSUES IN E-COMMERCE’, MONDAQ.
• SAKSHI SINGH, ‘E-COMMERCE LAWS AND REGULATIONS IN INDIA’, LAWSEARCH.
• YASHI SINGH, ‘E-COMMERCE ISSUES IN INDIA’, MAHARASHTRA NATIONAL LAW UNIVERSITY, MUMBAI, LAWCORNER.
• ‘E-COMMERCE IN INDIA’, ECONOMIC AND LEGAL REPRESENTATIVES.
• SAKSHI ATARWAL, SAKSHAR LAW ASSOCIATES.
• SAIFULLAH KHAN, ‘LEGAL ISSUES IN E-COMMERCE’, HANGZHOU FORUM: CROSS-BORDER E-COMMERCE, ORGANIZED BY
UNITED NATIONS CENTRE FOR TRADE FACILITATION AND ELECTRONIC BUSINESS [UN/CEFACT].

20. WEBLIOGRAPHY:
• https://www.nishithdesai.com/fileadmin/user_upload/pdfs/Legal_issues_in_eCommerce.pdf
• https://academic-pub.org/ojs/index.php/ijecs/article/view/976
• https://enterslice.com/learning/e-commerce-legal-issues/
• https://www.mondaq.com/india/it-and-internet/299686/legal-issues-in-e-commerce-think-before-you-
click
• https://vakilsearch.com/blog/e-commerce-laws-and-regulations-in-india/
• https://lawcorner.in/legal-issues-and-regulations-in-e-commerce/
• https://www.saksharlawassociates.com/e_commerce_in_india/
• https://unece.org/fileadmin/DAM/cefact/cf_forums/2018_China/eCommerce_Bio-
PPT/PPT_10_Khan.pdf/

21. THANK
YOU…