E-Consumer Protection in The Era of E-Commerce
Written by: Ms. Nikita Rai
Before heading towards the main content, we should first try to understand the meaning of an important word and that is E-commerce. Now, what exactly is E-commerce?
Electronic commerce or e-commerce is a term for any type of business, or marketable sale that involves the transfer of information across the Internet. It covers a range of different types of businesses, from consumer-grounded retail spots, through transaction or music spots, to business exchanges trading goods and services between pots. It’s presently one of the most important aspects of the Internet to crop. E-Commerce allows consumers to electronically change goods and services with no walls of time or distance. Electronic commerce has expanded fleetly over the once five times and is prognosticated to continue at this rate, or indeed accelerate. In the near future, the boundaries between “conventional” and “electronic” commerce will come decreasingly blurred as further and further businesses move sections of their operations onto the Internet.
Now In a moment’s world where everything is virtual, there are both pitfalls and advantages associated. Due to a major outbreak of COVID-19 in the time 2020, the operation of the virtual world has been honored more. It has also led to the conformation of important demanded legislation that governs the protection of the rights of the displeased consumers via redressal mechanisms. This composition focuses on the legal legislations and frames of e-commerce and the protection of e-consumer in this period.
With Liberalisation, Privatisation, and most importantly Globalisation due to the arrival of superior technological advancements, requests and marketable platforms have also taken the ‘e-highway’ to make a vast conglomerate of e-commerce reliance in recent times. This creates several benefits similar as wider reach, brisk delivery, and convenience to both the retailers and the consumers. Further, the onset of the Covid-19 epidemic in 2020 has further given rise to circumstances of surging fashionability of e-commerce platforms with a steep rise in consumers partaking in electronic programs of trade. This has also led to a myriad of issues for in case of insufficiency of service that acts as the core cause of action for consumer protection controversies, the liability is divided between the interposers (e-commerce platforms similar as Amazon or Flipkart) and the dealer.
The legal framework in India
The Information Technology Act, 2000 and Information Technology Rules (Intermediaries Guidelines), 2011 are the legislations that govern e-commerce practice in India. They provide remedies for the breaches in the e-contract and service areas of e-commerce platforms as well as the liability of intermediaries and the defenses available for the same (Section 79 of the IT Act 2000). The global nature of E-Commerce along with its rising popularity has led to a greatly developing sector of the economy in recent years.
As mentioned previously in this article the 2020 rise in the E-Commerce sector from USD 39 billion in 2017 to USD 120 billion proved to have an increase in consumers using the electronic trade platform. Irrespective of the same, e-consumers were still deprived of a certain legal framework that set out the presence of liability on the sellers and intermediaries involved in the same as the cookies tracking system provided a perennial flow of promotions for e-consumers and this too needed protection against. The installation of the international an applicable GDPR was paramount in the protection of the e-consumers privacy with modifiable tracking of their data. This promotion of consumer behavior is essentially focused on the delivery of the commodity products and the lack of legal frameworks for the same was an area of concern.
Privacy is a glaring concern for consumers partaking in the e-commerce trade due to the system of cookies and data tracking. The way E-commerce websites functions by making the most of technology in today’s times also plays a great role in enhancing the capacity of these e-commerce platforms to collect and analyses a huge amount of data from customers that visit their websites which of course now raises concerns about how this data is being treated and whether it is being kept secure. Moreover, the companies can record, track and sell a consumer’s shopping and banking practices by tracking their usage of credit cards, debit cards, and smart cards. Hence the protection for this data is of paramount importance under Consumer Rights Protection.
Consumer Protection Act, 2019 was made enforceable to fill in the lacuna in the preceding Act. The Act of 2019 deals with the provision of accurate information and description of goods to be provided as well as dealing with e-commerce dispute redressal at the forum under the provided jurisdiction. The dynamic nature of the market space must be considered validly for the amendments made to consumer protection mechanisms as witnessed by the introduction of this Act.
The Consumer Protection Act of 2019 was made enforceable on the 20th of July 2020 amidst the Global Covid-19 Pandemic that brought about massive reforms for the functioning of a digitized market space with new consumer protection laws. These rights include:
- 1. Right to Safety
- 2. Right to safety
- 3. Right to be informed
- 4. Right to choose
- 5. Right to be heard
- 6. Right to redress
- 7. Right to consumer education
Rule 2 of the Consumer Protection (E-Commerce) Rules, 2020 provides for the application of the same on firstly, all goods and services that include digital commodities such as e-books and movie streaming, where a transaction has taken place. The models covered under this provision encompass all formats of e-commerce market places including inventory. This legal framework not only takes into consideration domestic but also international intermediary networks as well be it a single brand or multi-brand retailing Lastly the cause of action under this legislation is applicable to any means of unfair trade practice or deficiency of service under the e-commerce platform model.
It is important to note that while the Act of 2019 covers all consumers, the 2020 Rules are applicable only to e-consumers of an e-commerce platform and not to a natural person. This electronic transaction must be independent and not part of a normal transaction. The major change in this legislation is that global nature in recognizing the international class of e-commerce in being applicable to extra-territorial entities.
The e-commerce retailer in most cases as an intermediary or third party falls under the definition of Market Place E-Commerce entity as given under Rule 3(g) of the E-Commerce Rules, 2020. This is because the e-retailer here acts as an entity that provides a web platform to facilitate transactions between sellers and consumers.
- a. Liability of the E-Commerce Entity
Rule 5 of the rules provides for the duties and liabilities for marketplace e-commerce entities which are as follows:
1. If the e-commerce entity seeks to avail the exemption under Section 79(1) of the Information Technology Act, 2000, as an intermediary, they must comply with the due diligence as mentioned under sub-section (2) and (3) of the same along with provision of the Information Technology (Intermediary Guidelines) Rules, 2011. In this case, it is the duty of the e-commerce entity to require sellers through an undertaking to ensure that the description of the goods and products of the seller is accurate in terms of appearance, nature, quality, etc. If these duties are not followed by the entity/intermediary, it would be held liable. The same has been seen in numerous cases such as Christian Louboutin Sas v. Nakul Bajaj & Ors. In this particular case the High Court at Delhi stated that the ‘safe harbor’ provided to the intermediaries is not absolute and that to fall under section 79 of the IT Act, there must be active participation by the intermediaries to ensure good action by their entity.
- b. Liability of the Seller
Rule 6 of the rules provides for the duties and liabilities for sellers in e-commerce transactions:
1. Rule 6(1)- The seller offering goods or services through a marketplace e-commerce entity mustn’t adopt unfair trade practices whether in the course of the offer or otherwise.
2. Rule 6(3)- The seller selling in a marketplace e-commerce entity mustn’t refuse to take back goods, or withdraw or discontinue services purchased or refuse to refund consideration if such goods or services are defective, deficient, or spurious.
The other duties imposed under this rule to the seller are to not post fake reviews, to fully disclose details of the product, and to enter into a valid contract with the appointment of a grievance officer. In cases where the seller is liable under these sub-sections, according to Section 8 of the rules in the case of the contravention of any of the provisions in the rules the provisions of the Consumer Protection Act, 2019 shall apply. This provides for valid remedies for the aggrieved consumer.
The introduction of the Consumer Protection Act, 2019 and the Consumer Protection (ECommerce) Rules, 2020 was due high time in the Indian legal system due to the surge in the IT as well as E-Commerce sectors in India. The placement of liability for not performing the duties mentioned portrays the interdependency of the Acts. The next step however in this process of creating a more consumer-friendly environment for e-consumers is the speedy disposal of cases arising out of breaches that will definitely ensure post the enforcing of the new legal framework.
The anticipated E-commerce Policy will also be heavily scrutinized for the rigidity of imposing liability on foreign investors must be legally compliant for consumer protection as well as not be too much of a deterrent to attracting foreign investment. Further, as the global nature of India’s e-commerce sector expands an application globally concerning issues such as data privacy must be dealt with, with a GDPR compliant Data Protection Bill (PDP Draft 2019). Control of the existing laws must also be incorporated into various fields such as Media law that affects the consumer immensely. Hence even though there exists a fairly sufficient legal framework for the protection of E-Consumers in the era of E-Commerce, the legal framework needs efficient implementation as well as expansion into other fields of law to be airtight to provide complete protection to the consumer’s right.
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