The Impact of the Consumer Protection Act 2019 on the E-Commerce Sector in India.

1. “The Impact of the Consumer
Protection Act 2019 on the
E-Commerce Sector in India”
Navigating the Consumer Landscape in the Digital Era
ANWESHA PANDA
LL.M. (Corporate Law)
Enrollment No.: 01016547023
USLLS, GGSIP University, Delhi

2. Agenda
1. Meaning of the term “Consumer”
2. Definition of “Consumer Protection”
3. Need for Consumer Protection
4. Legislative Measures for Consumer Protection
5. Overview of the Consumer Protection Act 2019
6. Consumer Rights under the Consumer Protection Act 2019
7. Key Features of the Consumer Protection Act 2029
8. Consumer Protection Act 2019 and E-commerce
9. Applicability of Consumer Protection (E-Commerce) Rules 2020
10. Consumer Protection Act 2019 and its Impact on E-Commerce
11. Conclusion

3. Meaning of the term “Consumer”
A consumer is a person who consumes or
uses any goods or services.
Goods may be consumables like wheat flour,
salt, sugar, fruit, etc. or durable items like
televisions, refrigerators, toasters, mixers,
bicycles etc.
Services include electricity, cooking gas,
telephone, transportation, film shows, etc.
Usually, the consumption or use of goods and
services makes the person to be called a
'consumer'. But in the eyes of the law, both
the person who buys any goods or hires any
service for consideration (price) and the one
who uses such goods and services with the
buyer's approval are termed as consumers.
For example, when your father buys apples for you,
and you consume them, your father and yourself are
treated as consumers.
The same thing applies to hiring a taxi to go to your
school. In other words, even the buyer of goods and
services, whether he uses them himself or
purchases them for consumption or use by some
other person(s), is treated as a consumer in the eyes
of the law.
However, a person who buys goods for resale (like
wholesalers, retailers, etc.) or for any commercial
purpose is not treated as a consumer.

4. Definition of “Consumer Protection”
Consumer protection refers to the set of laws, policies, and practices designed to safeguard
the rights and interests of consumers in the marketplace. The primary goal is to ensure fair
and ethical treatment of consumers by businesses, protecting them from deceptive or unfair
trade practices, substandard goods, and deficient services.
Consumer protection measures often include the establishment of legal frameworks,
regulatory bodies, and mechanisms for addressing consumer complaints and disputes. The
aim is to create a balanced and transparent marketplace where consumers can make informed
decisions and have recourse if their rights are violated. Consumer protection is crucial for
building trust, promoting fair competition, and maintaining the overall well-being of
consumers in the marketplace.

5. Need for Consumer Protection
Consumer Protection is needed because of the following reasons:
● Fair Treatment: Ensures consumers are treated fairly without deceptive or unfair
practices.
● Quality Assurance: Guarantees the safety and quality of goods and services.
● Information Transparency: Requires businesses to provide clear and accurate product
information.
● Redressal Mechanism: Establishes avenues for consumers to seek compensation for
issues.
● Market Confidence: Builds trust, fostering a healthy and competitive business
environment.
● Encourages Innovation: Promotes product and service improvements to meet
consumer expectations.
● Economic Stability: Prevents fraudulent activities, contributing to market stability.

6. Legislative Measures for Consumer Protection
The Consumer Protection Act 1986
The Consumer Protection Act 1986 was a landmark legislation in India to safeguard
consumer rights and interests. It provided legal recourse for consumers in case of unfair
trade practices and defects in goods or deficient services. However, it has now been
repealed and replaced by the Consumer Protection Act 2019.
The Consumer Protection Act 2019
The Consumer Protection Act 2019 is a comprehensive legislation in India designed to
strengthen consumer rights and address issues arising in the digital era. It has replaced the
Consumer Protection Act 1986, offering updated and expanded provisions to ensure more
effective consumer protection against unfair trade practices and substandard goods or
services.

7. Overview of the Consumer Protection Act 2019
The Consumer Protection Act 1986 was repealed to address its outdated framework and
inadequacies in handling modern market complexities, especially in the digital era. The
introduction of the Consumer Protection Act 2019 became essential due to emerging challenges
related to online transactions, data protection, and evolving consumer concerns. The new
Consumer Protection Act 2019 aimed to strengthen consumer rights by providing more robust
grievance redressal and compensation mechanisms. It also sought to align with global best
practices, ensuring India's consumer protection framework met international standards. The
legislative update was necessary to adapt to contemporary challenges and provide
comprehensive protection in an evolving economic and technological landscape. It replaced the
Consumer Protection Act of 1986. It introduced significant changes to adapt to modern
challenges, especially in e-commerce. The Act establishes a Consumer Protection Authority to
ensure efficient enforcement. It addresses concerns about misleading advertisements, unfair
trade practices, and product liability. It empowers consumers with rights to seek compensation,
file class-action suits, and promote alternative dispute resolution mechanisms. The legislation
reflects a proactive approach to safeguarding consumer interests in the rapidly evolving
marketplace.

8. Consumer Rights under the
Consumer Protection Act 2019
Section 2(9) of the Consumer Protection Act 2019 provides six consumer rights, which are as
follows:
1. The right to be protected against marketing goods, products or services that are hazardous
to life and property.
2. The right to be informed about the quality, quantity, potency, purity, standard and price of
goods, products or services, as the case may be, to protect the consumer against unfair trade
practices.
3. The right to be assured, wherever possible, access to various goods, products or services at
competitive prices.
4. The right to be heard and to be assured that consumers’ interests will receive due
consideration.
5. The right to seek redressal against unfair trade practices, restrictive trade practices or
unscrupulous exploitation of consumers.
6. The right to consumer awareness.

9. Key Features of the Consumer Protection Act 2019
While retaining certain old provisions, the New Act has certain new provisions that tightens the
existing rules to further safeguard consumer rights and create exhaustive consumer protection law.
The new Consumer Protection Act 2019 include features like:
● Widened Definition of “Consumer”
● Enhancement of Territorial Jurisdiction
● Changes in the Pecuniary Jurisdiction
● Alternate Dispute Resolution
● Inclusion of E-Commerce
● E- Complaints
● Establishment of the Central Consumer Protection Authority
● Strict Norms for Misleading Advertisement
● Provisions for Product Liability
● Addition to the clause on “Unfair Trade Practice”
● Endorser’s liability

10. Widened definition of “Consumer”
The Consumer Protection Act 2019 has
widened the definition of ‘consumer’. As
per Section 2(7) of the Act, a person is
called a consumer who avails the services
and buys any good for self-use. It is worth
mentioning that if a person buys any good
or avails any service for resale or
commercial purposes, they are not
considered a consumer. This definition
covers all types of transactions, i.e. offline
and online through teleshopping, direct
selling or multi-level marketing.
The definition of ‘Consumer’ under the old
Consumer Protection Act 1986 did not
include online transactions.
Enhancement of Territorial Jurisdiction
The Consumer Protection Act 2019 now
provides an added advantage to the
consumers by allowing them to file
complaints where the complainant resides
or personally works for gain, unlike the
1986 Act, which only provided for filing
complaints where the opposite party resided
or carried on business. This helps remove
consumers' difficulties in seeking redressal
for their grievances against companies that
may not have an office or branch in their
state.

11. Changes in the Pecuniary Jurisdiction
The revised pecuniary limits have been
fixed under the 2019 Act. They are:
The District Consumer Redressal
Commission can now entertain consumer
complaints where the value of goods or
services paid does not exceed Rupees One
Crore (Section 34).
The State Consumer Redressal
Commission can entertain disputes where
such value is between Rupees One Crore
and Ten Crore (Section 47).
The National Consumer Redressal
Commission can exercise jurisdiction
where such value exceeds Rupees Ten
Crore (Section 58).
Alternative Dispute Resolution
2019 Act ensures speedy resolution of
disputes by referring the disputes to
mediation. As per the 2019 Act, the
Consumer Redressal Commissions shall
refer the matter for mediation on an
application by both parties (Section 37).
For this purpose, the 2019 Act also provides
for establishing consumer mediation cells
by the respective State Governments in each
District Commission and State Commission
as well as at the National Commission by
the Central Government (Section 74).

12. Inclusion of E-Commerce
The earlier Act did not specifically
include e-commerce transactions.
The New Act has addressed this
lacuna. 'E-commerce' and 'electronic
service provider' have been defined
under the Act. 'E-commerce' is
defined as buying or selling goods or
services, including digital products,
over digital or electronic networks.
The central government has been
authorized to take measures and
make rules to prevent unfair trade
practices in e-commerce.
E- Complaints
Consumers may forward a complaint, either in writing
or electronically, regarding the violation of consumer
rights, unfair trade practices, or false/misleading
advertisements prejudicial to the interests of consumers
as a class to any one of the authorities, namely, the
District Collector, the Commissioner of the regional
office, or the Central Authority (Section 17).
The 2019 Act also provides for filing Complaints
electronically before the District Forums by the
government's prescribed rules (Section 35). The New
Act also enables consumers to file complaints
electronically and to hear and/or examine parties
through video-conferencing. This is aimed to provide
procedural ease and reduce inconvenience and
harassment for the consumers.

13. Establishment of the Central
Consumer Protection Authority
The New Act provides for the
establishment of the Central
Consumer Protection Authority
(CCPA) to regulate matters relating
to the violation of the rights of
consumers, unfair trade practices and
false or misleading advertisements
which are prejudicial to the interests
of the public and consumers and to
promote, protect and enforce the
rights of consumers as a class
(Section 10).
Strict Norms for Misleading
Advertisement
Any manufacturer or service provider
who causes a false or misleading
advertisement to be made which is
prejudicial to the interest of consumers
shall be punished with imprisonment
for a term which may extend to two
years and with a fine which may
extend to Rupees Ten Lakh and for
every subsequent offence, be punished
with imprisonment for a term which
may extend to five years and with fine
which may extend to Rupees Fifty
Lakh (Section 89).

14. Provisions for Product Liability
The New Act introduces Chapter VI,
which deals with product liability. These
provisions based on strict liability
principles will enable the complainant to
claim compensation for the harm caused
due to defective products or services.
Addition to the clause on “Unfair
Trade Practice”
The New Act introduces a specific broad
definition of Unfair Trade Practices,
which also includes the sharing of
personal information given by the
consumer in confidence unless the
provisions of any other law make such
disclosure [Section 2 (47)].

15. Endorser’s liability
The Consumer Protection Act 2019 fixes
liability on endorsers, considering that
there have been numerous instances in the
recent past where consumers have fallen
prey to unfair trade practices under the
influence of celebrities acting as brand
ambassadors. In such cases, it becomes
essential for the endorser to take the onus
and exercise due diligence to verify the
integrity of the claims made in the
advertisement to refute liability claims.
.

16. Consumer Protection Act 2019 and E-Commerce
E-Commerce
Under the Consumer Protection Act 2019, E-commerce means buying or selling
goods or services, including digital products, over digital or electronic networks.
[Section 2(16)].
E-commerce Entity
“E-commerce Entity” means any person who owns, operates or manages a 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.

17. Applicability of Consumer Protection
(E-Commerce) Rules 2020
Rule 2 : The e-commerce regulations apply to:
● Any goods and services purchased and sold through a digital or electronic network,
including digital items;
● All e-commerce models, including marketplace and inventory-based e-commerce.
● All e-commerce retail, including multichannel single-brand merchants and
single-brand merchants operating in single or multiple formats.
● All sorts of deceptive commercial practices across all e-commerce models.
Provided that these rules shall 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.

18. Consumer Protection Act 2019 and its Impact on
E-Commerce
E-commerce involves online transactions between buyers and sellers. To prevent unfair
practices like price manipulation, the government has implemented a standard code for all
e-commerce businesses in India under the Consumer Protection Act 2019. These rules aim
to regulate the industry, ensuring fairness and resolving consumer issues efficiently.
● Consumer’s Consent: For the purchase of goods, e-commerce entities need express
consent from their consumers, which cannot be recorded automatically.
● Price manipulation: To earn profits, e-commerce businesses are prohibited from
changing the sale price of items. E-commerce companies cannot use unethical
approaches like cash-back incentives to influence customers' decisions towards a
particular seller. According to the National Consumer Disputes Redressal
Commission and the District Consumer Disputes Redressal Commission, charging
more prices than the MRP violates the Consumer Protection Act.

19. ● Consumer Discrimination and Disclosure of Preferential Treatment to Sellers:
E-commerce entities should disclose the terms and conditions to their sellers and describe any
preferential treatment given to any specific seller(s) or to any items or services in the same
category by a marketplace. Knowledge about all sales and purchase commodities and the type
of products should be given to customers, and it should also ensure that there is no
discrimination among consumers of the same class.
● Cancellation Charges: If the consumers cancel an order, then no cancellation charges should
be taken from consumers.
● Timely Refunds: The refund should be given on time. All requests for refunds should be
solved within a reasonable period.
● Grievance Redressal Officer: To solve consumers' complaints, e-commerce entities must
appoint a grievance redressal officer, and all the essential details of the grievance redressal
officer must be displayed online.
● Nodal Person of Contact: E-commerce entities can also appoint a nodal person of contact to
ensure compliance with the provisions of the Consumer Protection Act and e-commerce rules.
● Complaint Token: E-commerce entities should provide a ticket number for each consumer
complaint. This practice has been made compulsory for e-commerce entities for tracking the
complaint status.

20. There are several obligations for the sellers who list goods on the e-commerce platform.
The obligations are as follows:
● Written Contract: E-commerce entities must enter into a written contract with sellers
following the e-commerce rules. Due to this contract, e-commerce entities and the
sellers are bound to their responsibilities.
● False or Misleading Advertisements: According to the rule, the sellers can't refuse to
take the goods when the goods don't conform to the advertised features and if the
images of the goods used in advertisements are inconsistent with the actual
characteristics of the goods.
● Disclosure: The information about the seller's legal name, address, contact details,
customer care number, PAN, country of origin, and any other relevant details should be
disclosed.
● Grievance Redressal Officer: The obligation of appointing a grievance redressal
officer has also been extended to the sellers.

21. ● Ensuring Product Accuracy and Consistency on E-commerce Platforms:
Every marketplace e-commerce entity is liable to ensure that sellers sell accurate
products on their platforms. They must ensure that the appearance and features,
quality, and colour of the product shown are consistent with the original product.
● Ensuring Transparent Information on E-commerce Platforms: E-commerce
entities must display pertinent seller details, such as business name, registration
status, geographic address, and customer care number. Additionally, any ratings or
feedback about sellers should be accessible. The platform must also provide
information facilitating consumer-seller communication in response to written
requests.
● Clear Payment Options: Payment options must be made clear to the consumers,
and all the charges, including the procedure of cancelling payment, must be
transparent to the consumer. The terms and conditions mentioned on the website
must include information to determine the entity's relationship with the seller.

22. Conclusion
In conclusion, the Consumer Protection Act 2019 heralds a new era of
consumer rights and safeguards in the evolving realm of e-commerce.
With a specific focus on addressing contemporary challenges, the Act
empowers consumers, ensures transparency, and establishes mechanisms
to resolve disputes efficiently. As e-commerce continues to shape our
marketplace, the Act is a crucial framework, promoting fair practices,
protecting consumer interests, and fostering a trustworthy and vibrant
digital economy. The impact of this legislation resonates in its ability to
create a balanced and secure environment for both consumers and
e-commerce entities alike.

23. Thank You!