Consumer protection

1. CONSUMER PROTECTION (E-COMMERCE) RULES,2020
STUDENT : PIYUSH JAISINGHANI , SRN : 202101449 , SUBJECT : CONSUMER PROTECTION , CIE : 2 , FACULTY : PADMAJA MAM
DEPARTMENT : LAW & GOVERNANCE , UNIVERSITY : VISHWAKARMA UNIVERSITY .
• The Central Government, by way of a
notification, has made the consumer
protection rules, in the exercise of the
powers conferred under section 101, sub-
clause (zg) of sub-section (1) of the
Consumer Protection Act, 2019.
• These rules must 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.
• These rules must apply to an e-commerce
entity which is not established in India, but
systematically offers goods or services to
consumers in India. Also, these consumer
protection rules will apply to the
following:

2. • Duties of E-commerce Entities
• According to Consumer Protection Rules, an e-commerce entity is : A company registration under the Companies Act, 2013 or a foreign company covered under
clause (42) of section 2 of the Companies Act, 2013 Or an office, branch or agency outside India owned or controlled by a person resident in India provided under
section 2 sub-clause (iii) of clause (v) of the Foreign Exchange Management Act, 1999 Every e-commerce entity must provide the following information in a
clear and accessible manner on its platform, displayed prominently to its users, that is: The legal name of an e-commerce entity , The principal address of its
headquarters and all branches , Name and other details of its website Contact details like e-mail address, fax, mobile, and landline numbers of customer care.
• The e-commerce entity must not adopt any unfair trade practice in business on this platform or otherwise.
• The e-commerce entity must establish an adequate grievance redressal mechanism regarding the number of grievances ordinarily received by such entity from India.
It must appoint a grievance officer for consumer grievance redressal to display the name, contact details, and also the designation of such an officer.
• The e-commerce entity must ensure that the grievance officer acknowledges the receipt of any consumer complaint within 48 hours and redresses the complaint
within one month from the date of receipt of the complaint.
• The e-commerce entity offers imported goods or services for sale. It must provide the name and details of the importer from whom it has purchased such goods or
services, or who may be a seller on its platform.
• The e-commerce entity must endeavor on a best effort basis to become a partner in the process of the National Consumer Helpline of the Central Government.
• The e-commerce entity must not impose cancellation charges on consumers canceling after confirming purchase unless the e-commerce entity bears similar charges
if they cancel the purchase order unilaterally.
• The e-commerce entity must only record the consent of a consumer for the purchase of any good or service offered, where such consent is expressed through an
explicit and affirmative action.
• The e-commerce entity must accept 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 for the time being in force, within a reasonable period of time, or as prescribed applicable laws.
• According to consumer protection rules, the e-commerce entity must not:
1. Manipulate with the price of the goods or services offered in such a manner as to gain unreasonable profit by imposing on consumers any unjustified price having
regard to the prevailing market conditions, or;
2. Discriminate between the same class of consumers or make any arbitrary classification of consumers affecting their rights under the Act.

3. • Liabilities of marketplace E-commerce Entities
• The marketplace e-commerce entity which seeks to avail the exemption from the liability under sub-section (1) of section 79 of
the Information Technology Act, 2000 has to comply with sub-sections (2) and (3) of the section, including the provisions
under Information Technology (Intermediary Guidelines) Rules, 2011.
• The marketplace e-commerce entity must require sellers through an undertaking to ensure the descriptions, images, and other
content pertaining to goods or services is accurate.
• The marketplace e-commerce entity has to provide the following information in a clear and accessible manner, to its users at the
appropriate place:
1. Details regarding the sellers offering goods and services, including the name of the business, have to mention whether it is
registered or not, address, customer care number, any rating or other aggregated feedback about such seller, and any
additional information necessary for enabling consumers to make informed decisions at the pre-purchase stage.
2. A ticket number for each consumer complaint lodged by which the consumer can track the status of a complaint
3. The information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, and
grievance redressal mechanism, which is required by consumers
4. The information on available payment methods, the security of those payment methods, fees, or charges payable by users, the
procedure to cancel regular payments under those methods, charge-back options, and the contact information of the relevant
payment service provider.
5. All information provided by the sellers under sub-rule (5) of rule 6 and an explanation of the main parameters, which,
individually or collectively, are most significant in determining the ranking of goods.
• The marketplace e-commerce entity must include in its terms and conditions generally governing its relationship with sellers on
its platform, a description of any differentiated treatment it gives or might give between goods or services or sellers of the same
category.
• The marketplace e-commerce entity must make reasonable efforts to maintain a record of relevant information allowing for the
identification of all sellers who have repeatedly offered goods or services that have previously been removed or access to which
has already been disabled under the Copyright Act, 1957, the Trade Marks Act, 1999 or the Information Technology Act,
2000.

4. • Duties of Sellers at the Marketplace
• The seller offering goods or services through a marketplace e-commerce entity must not adopt any unfair trade practice in the offer on the e-commerce entity’s
platform.
• The seller must not falsely represent itself as a consumer and post reviews about goods or services.
• The seller offering goods or services through a marketplace e-commerce entity must not refuse to take back goods, or withdraw or discontinue services purchased or
agreed to be purchased, or refuse to refund consideration if paid, if such goods or services are defective, deficient or spurious, or delivered late from the stated
delivery schedule.
• The seller offering goods or services through a marketplace e-commerce entity must:
1. It must have a prior written contract with respect to the e-commerce entity to undertake or solicit the sale or offer;
2. It must appoint a grievance officer for the purpose of consumer grievance redressal and ensure that the grievance officer acknowledges the receipt of any
consumer complaint within 48 hours and redresses the complaint within 1 month from the date of receipt of the complaint;
3. It must ensure that the advertisements for the marketing of goods or services are consistent with the actual characteristics, access, and usage conditions of such
goods or services.
4. It has to provide the e-commerce entity its legal name, address of its headquarters and all branches, the name and details of its website, its e-mail address,
customer care contact details such as fax, landline, and mobile numbers and also its GSTIN and PAN details.
• The seller offering goods or services through a marketplace e-commerce entity must provide the following information to the e-commerce entity to be displayed on
its platform or website:
1. The contractual information required to be disclosed by law;
2. The total price in the single figure of any good or service, along with the breakup price for the goods or services. It has to show all the compulsory and voluntary
charges such as delivery charges, postage and handling charges, conveyance charges, and the applicable tax.
3. The mandatory notices and information provided by applicable laws, and the expiry date of the good being offered for sale.
4. The relevant details about the goods and services offered for sale by the seller including country of origin which are necessary
5. The name and contact numbers, and also the designation of the grievance officer for consumer grievance redressal
6. The name and details of the importer, and guarantees related to the authenticity or genuineness of the imported products;
7. The accurate information related to terms of exchange, returns, and refund
8. The relevant details related to delivery and shipment of such goods or services;
9. The relevant guarantees or warranties are applicable to such goods or services.

5. • Duties and Liabilities of Inventory E-commerce Entities
• The inventory e-commerce entity must provide the following information inaccessible manner, displayed prominently to its
users:
1. The accurate information related to return, refund, exchange, warranty and guarantee, delivery and shipment, cost of return
shipping, mode of payments, and grievance redressal mechanism, required by consumers to make informed decisions;
2. The mandatory notices and information required by applicable laws;
3. The information on available payment methods, the security of those payment methods, the procedure to cancel regular
payments under those methods, any fees or charges payable by users
4. The contractual information required to be disclosed by law;
5. The total price in the single figure of any good or service along with the breakup price for the good or service, showing all
the compulsory and voluntary charges, such as delivery charges, postage and handling charges, conveyance charges and the
applicable tax.
• The inventory e-commerce entity must ensure that the advertisements for the marketing of goods or services are consistent with
the actual characteristics, access, and usage conditions of such goods or services.
• The inventory e-commerce entity must not falsely represent itself as a consumer and post reviews about goods and services or
misrepresent the quality of any goods or services.
• The inventory e-commerce entity must not refuse to take back goods, or withdraw or discontinue services purchased or agreed
to be purchased, or refuse to refund consideration if paid, if such goods or services are defective, deficient spurious, or if the
goods or services are not of the characteristics or features as advertised or as agreed to, or if such goods or services are delivered
late from the stated delivery schedule.
• Any inventory e-commerce entity that explicitly or implicitly vouches for the authenticity of the goods or services sold by it, or
guarantees that such goods or services are authentic, must bear appropriate liability in any action related to such good or service.

6. • Contravention of the Rules:
• In case of contravention of these Rules, the provisions enshrined under the Consumer Protection Act,2019 will apply and in
such a case, the e-commerce entities in question would be required to comply with authorities that shall be investigating such a
contravention and shall be imposed with fines or imprisonment, if found guilty. These Rules also have incorporated certain
requirements that have been prescribed under the Legal Metrology Rules (LM Rules) and other laws that are applicable. In the
absence of clarity, penalties mentioned in the LM Rules may also be levied on the e-commerce entities in question.
• Conclusion:
• These Rules have significantly increased the responsibilities that e-commerce Platforms have towards their consumers.
However, these Rules are not perfect as there are still certain questions that need answering regarding things like the
implementation and application of the Rules and whether they are ultra vires the Act as they apply to entities outside the
country, obligations that have been imposed on Platforms that extend beyond the consumer and seller relationship, whether
these Rules are applicable on B2B Platforms and what kinds of digital product offerings fall within its purview.
• Also, as the origin of these Rules can be tracked to Section – 94 of the Consumer Protection Act,2019 it has to be seen that
whether any breach of these Rules will have to satisfy the condition or test of being an "unfair practice" before they are held
liable and whether a breach by a seller can also result in the Platform being held liable.
• Hence, even though these Rules are a welcome step in ensuring the interest of the Consumers, the Rules still leave some
ambiguity regarding certain factors. Therefore, these Rules are a boon for all the consumers that were affected by a lack of these
regulations and a bane for the Platforms scrambling to implement them. In order to answer some of the questions that were
raised in accordance to these Rules, the Ministry released a Notification dated May 17, 2021, introducing the Consumer
Protection (E-Commerce) (Amendment) Rules, 2021 which introduced the requirement for a company outside India or company
having an office, branch or agency outside India, controlled by a person resident in India, it shall appoint a nodal officer or an
alternate senior designated functionary who is an Indian resident to ensure that the provisions of the act and the Rules are being
followed and abided by.

7. • Consumer Vs Snapdeal Pvt Ltd , National Consumer Dispute Redressal Commission,2020
• Issue:
• Whether Snapdeal violated the Consumer Protection (E-Commerce) Rules, 2020 by selling counterfeit products on its platform, and if so, what
penalty should be imposed on the company?
• Rule:
• The Consumer Protection (E-Commerce) Rules, 2020 were introduced by the Indian government to regulate and protect consumers in the e-
commerce industry. The rules require e-commerce companies to exercise due diligence in verifying the authenticity of the products sold on their
platforms, and to take measures to prevent the sale of counterfeit products. Violation of the rules can result in penalties and other legal
consequences.
• Application:
• In this case, a consumer filed a complaint with the National Consumer Disputes Redressal Commission (NCDRC) alleging that Snapdeal had
sold counterfeit products on its platform, in violation of the e-commerce rules. The NCDRC investigated the matter and found that Snapdeal
had indeed violated the rules by failing to exercise due diligence in verifying the authenticity of the products sold on its platform, and by not
taking adequate steps to prevent the sale of counterfeit products.
• The NCDRC imposed a penalty of Rs. 10 lakh on Snapdeal and directed the company to remove all counterfeit products from its platform and
take measures to prevent their sale in the future.
• Conclusion:
• Based on the above analysis, it is clear that Snapdeal violated the Consumer Protection (E-Commerce) Rules, 2020 by selling counterfeit
products on its platform. The NCDRC's penalty and directives to the company serve as a reminder to e-commerce companies that they must
take their responsibility to ensure consumer protection seriously and implement effective measures to prevent the sale of counterfeit products on
their platforms.

8. • Club Factory Pvt Ltd Vs Ministry of Consumer Affairs,2021
• Issue:
• Whether Club Factory violated the rules by not displaying the name and details of the importer, seller, and country of origin of its products, and if so,
whether the ban imposed by the Ministry of Consumer Affairs, Food and Public Distribution was justified.
• Rule:
• Consumer protection laws require e-commerce platforms to provide transparent and accurate information about the products being sold, including the
name and details of the importer, seller, and country of origin. The Legal Metrology Act, 2009, and the Consumer Protection Act, 2019, are the primary
legislations governing consumer protection in India. Violation of these laws can result in penalties, bans, or other legal consequences.
• Application:
• In this case, Chinese e-commerce platform Club Factory was banned by the Ministry of Consumer Affairs, Food and Public Distribution in June 2021 for
violating the rules by not displaying the name and details of the importer, seller, and country of origin of its products. The ban was lifted later that year
after the company complied with the rules.
• The Ministry found that Club Factory was not providing accurate information about the products being sold on its platform, which was a violation of the
consumer protection laws. The company had not provided the name and details of the importer, seller, and country of origin of its products, which made it
difficult for consumers to make informed choices and raised concerns about product safety.
• Club Factory argued that it was not required to display such information as it was a marketplace platform that only facilitated transactions between buyers
and sellers. However, the Ministry rejected this argument and stated that Club Factory was responsible for ensuring that the sellers on its platform
complied with the rules.
• Conclusion:
• Based on the above analysis, it is evident that Club Factory violated the consumer protection laws by not providing accurate information about the
products being sold on its platform. The ban imposed by the Ministry of Consumer Affairs, Food and Public Distribution was justified in light of the
violation. The case serves as a reminder to e-commerce platforms that they must comply with the rules and regulations governing consumer protection in
India