The Consumer Protection Act, 2019 comes into force – Know how it will impact E-commerce platforms

Receiving the assent of the President of India, The Consumer Protection Act (2019) was published in the official gazette on August 9, 2019. This Act seeked to replace the more than three decades old Consumer Protection Act, 1986.

Ram Vilas Paswan, Union Minister for Consumer Affairs, Food & Public Distribution said this new Act will empower consumers and help them protect their rights. As this new Act came into effect on July 20, 2020, here are the key highlights that you need to know.

The Act covers e-commerce platforms
Widening the definition of ‘consumer’, the definition now includes any person who buys any goods, whether through offline or online transactions, electronic means, teleshopping, direct selling or multi-level marketing. It also includes all models of e-commerce, including marketplace and inventory models of e-commerce. The earlier Act did not specifically include e-commerce transactions, and this gap has been addressed by the New Act.

E-filing of complaints
Unlike the current practice of filing complaints at the place of purchase or where the seller has registered the office address, the New Act provides flexibility to the consumers wherein they can file complaints electronically and for hearing and/or examining parties through video-conferencing.

Product Liability & Penal Consequences –
The New Act has introduced the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation. The term ‘product seller’ would include e-commerce platforms as well. The defense that e-commerce platforms merely act as ‘platforms’ or ‘aggregators’ will not be accepted.

  • Penalties for misleading advertisements:
    In case of a false or misleading advertisement, the CCPA may impose a penalty of up to INR 1,000,000 (Indian Rupees One Million) on a manufacturer or an endorser and may also sentence them to imprisonment for up to 2 years. The liability of the false claims of an advertisement has also been extended to the endorser, since there have been cases where consumers fell prey to false advertising under the influence of celebrities acting as brand ambassadors.
  • E-commerce Rules:
    According to the New Act, e-commerce platforms are required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options, etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.
    Kartify, powered by ANS Commerce, includes these functionalities, making the platform secure and trustworthy for the consumer to use.
  • Consumer complaints on e-commerce platforms:
    E-commerce platforms are now required to acknowledge the receipt of any consumer complaint within 48 hours and redress the complaint within 1 month from the date of receipt.

According to Ram Vilas Paswan, the Union Minister for Consumer Affairs, Food & Public Distribution, the earlier Consumer Protection Act, 1986a provided a single point access to justice, which was also time consuming.

The Consumer Protection Act, 2019 includes provisions that suit the current trend of the digital landscape, making sure the customer’s hassles are substantially reduced. The Act provides consumers with protection not only from traditional retailers but also e-commerce platforms where most brands have grown to start selling their products and services. In order to do so, this act imposes more accountability from e-commerce platforms, manufacturers, retailers and endorsers and can impose penalties on any of these parties. Moreover, there have also been new provisions added which aim to speed the process of clearing any grievances of the consumer by introducing online methods of filing complaints while also mandating that e-commerce websites address these complaints within a 48-hour window and resolve matters within 30 days of the complaint being registered.

While it would take time to adjust to the new provisions made by this Act, it will certainly result in consumer rights being more protected and a speedier method of resolving consumer disputes in the country.