Electronic commerce or internet commerce is commonly referred as E-commerce, which can be understood as, buying and selling of products and services through the medium of internet along with transfer of money and data for the execution of the deal. In today’s time with such advancement in technology and fast-moving lifestyle the e-commerce sector has seen a rapid growth, it has evolved making products and services easily available at a click. It has engaged a lot of people, small business, Independent freelancers, large corporations, having a huge network of manufactures, producers, service providers and customers. With the emergence of e-commerce many questions have arisen regarding the accountability and transparency of such online platforms, consumers are often found in a position of chaos as there is an absence of proper channel of redressal for complaints. Considering the same the parliament passed the consumer protection bill 2019 to replace the consumer protection act,1986 which was implemented on 20th July 2019.
The purpose of this act is to provide timely and effective settlement and remedy to the consumers in regards with e-commerce. The approach of the government is to facilitate a consumer-friendly environment in e-commerce market, the government passed the consumer protection(e-commerce) rule,2020 as to regulate e-commerce market.
It has now differentiated between the e-commerce entity and market e-commerce entity, as per the rules “e-commerce entity” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but a seller offering his goods or services for sale on a marketplace e-commerce entity is not included within the preview of this definition; and “marketplace e-commerce entity” refers to an e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers.
The liabilities and duties for both differ as well, E-commerce entity has to appoint a person of contact and disclose vital information as their legal name, address of their headquarters along with all the branches, name and details of its website, contact details like e-mail address, fax, landline and mobile numbers of customer care as well as of grievance officer. The e-commerce entities shall establish an adequate grievance redressal mechanism and shall duly appoint a grievance officer for the same.
The main highlight is that every e-commerce entity shall ensure that the grievance officers acknowledge the receipt of any consumer complaint within the time frame of forty-eight hours and redresses the complaint within one month from the date of receipt of the complaint made by the consumer.
In the context of market place e-commerce similar regulations have been imposed in regards with proper disclosure of their details and details about the product along with information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, and grievance redressal mechanism, and any other similar information which may be required by consumers to make informed decisions.
No seller offering goods or services through e-commerce entity shall refuse to return, or withdraw or discontinue services purchased or agreed to be purchased, or refuse to refund consideration, in case paid, if such goods or services are defective, deficient or forged, or if the goods or services are not up to the mark, or if such goods or services are delivered late from the stated delivery schedule provided to the consumer. (exception of force majeure would be applicable)
The new act has given a more comprehensive outlook to terms like “consumers” and “unfair trade practices”. The definition of a consumer now includes the consumers involved in online market places and it has enlarged the scope of Unfair Trade Practice with incorporating within its ambit online misdirecting notices; the act of not providing a proper bill for the goods and services; neglecting to reclaim flawed products or deactivate faulty services and refund the amount within the specified time referred in the bill or time span of 30 days in absence of any notification about the time limit; and disclosing personal data of a customer except if such revelation is as per law. These changes are significant in light of the consumer protection act of, 1986 which somewhere lacked in addressing the issues and loopholes of the e-commerce platform.
The concept of “unfair contracts” which are in favor of manufactures and service providers and are biased towards the consumers for instance, contracts that enables the consumer to pay a heavy amount of security deposits for performance of contractual obligations, imposing penalty on consumer for breach of contract which is more than the loss incurred by the other party, terminating a contract without a reasonable cause, declining to acknowledge early reimbursement of debts on applicable penalty, imposition of any condition, clause or any terms which put the consumer in the position of the party incurring loss and contracts of such nature are now covered under this concept is introduced in the act; providing consumer to complaint about such practices. This will help in curbing the exploitation of the consumer at the hand of these e-commerce business and banks which have a predominance in the field putting the consumer in a place to agree with these unfair conditions.
The most significant and major concept introduced in the new act is, “product liability”. Prior to this the theory of product liability was not in existence in form of legal framework. The act defines, product liability as "the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto." Thus, it includes product manufacturer, product service provider, product seller, for claim of compensation. Earlier the e-commerce sites use to take the ground of mere “aggregators” and “intermediaries” to get away from the liabilities but now this ground will not be acceptable in court of law. Present day, not only the manufacturer but the seller will also be liable to compensate if it justifies the conditions stated in the new act. The liabilities of the manufacturer, service providers and sellers are specified in regards of the compensation to the consumer, the exceptions have been provided for the same.
In case the product contains some manufacturing defect, product or a part of product is faulty, does not conform to the warranty given by the manufacturer or does not contain proper instructions of handling or usage or a warning; here the manufacturer shall be liable. Same way, a service provider will be liable if services provided were faulty, deficient, inadequate instructions and warning or does not conform by the terms and conditions of warranty. Liabilities of a seller arises, if there exist modification, alteration or a substantial change which might damage the product or cause harm, there has been a negligence in handling of the product and not following the instructions for assembling or management of the product.
The act has elaborated upon the conditions where the liability arises, this gives a clear picture to the consumer for filing for compensation in case of damages, putting an end to the dominance of manufactures, sellers or service providers in e-commerce. The consumer can raise a product liability claim by filing a complaint before District commission, State commission and National commission. The new act has also introduced a new way of filing complaints, one can file complaint electronically(online).
Conclusively, the act has provided a clear and fair passage for the consumers dealing in e-commerce market, it has incorporated the much-needed changes in the age of digitisation. The act of 1986 lacked in providing the holistic approach in terms of e-commerce market, defining the concept of service providers, manufacturers, e-commerce market place than merely including them under the purview of “aggregators”. The liabilities and duties of different entity engaging in e-commerce have been properly enlisted to resolve any grievance of the consumer, solving the issue of a proper channel of redressal for consumers in e-commerce market.
The legal framework of the concept of product liability made the service provider take the responsibility along with product manufacturer and seller if the rights of the consumer are infringed due to any defect in goods and services, it seeks liability from the end which caused the problem. Thus, one can say in the new rules and act the consumer is the beneficiary in the times of e-commerce booming everyday with some new advancement. It has facilitated the consumer to seek redressal in a simple and fast-track manner and it’s a comprehensive act now covering all the aspects within its ambit.
CONSUMER PROTECTION (E-COMMERCE) RULES,2020 https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf
CONSUMER PROTECTION ACT,2019 https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf
Written By: -
B.A., LL.B (H)
Amity University, Noida