E-commerce Entities and the Consumer Protection Act 2019

Introduction

The E-commercial activities and the E-commerce business are rapidly growing worldwide. In India, according to a report of ‘Ministry of Communication,’ the number of users of mobile will reach 730 billion. In E-commerce, the transaction occurs directly with the consumers. This is also called B2C. In the case of B2C business, the most important factor is the confidence of the consumer for the more growth of the business. So, the Government of India passes the “Consumer Protection Act 2019’ in order to deal with the new problems and issues that are arising in this digital age due to the rapid growth of digital marketing. This act replaced the old act “Consumer Protection Act 1986”.  The government notifies the ‘Consumer Protection (e-commerce) Rules 2020’ on 23^rd July 2020.

• Consumer Under the Act

Under the acting consumer is a person who

• Buys or sells or hires goods or services offline or
• Through electronic means
• Buys or sells or hires goods or services via teleshopping or
• Buys or sells or hires goods or services via direct selling or multi-level-marketing.

And this buying or selling shall the purpose of earning a livelihood or for own use, not for the commercial use.

• Application of the Act

The Act applies to all kinds of goods and services even to the goods and services bought or sold electronically. It also applies to digital products.

 

• E-commerce Entity under the Consumer Protection Act 2019 and Rules of 2020

The Act defines E-commerce as- it is a business of buying or selling goods via electronic or digital networks. It also includes digital products.

And, an E-commerce Entity is an entity that manages or operates, or owns the platform of the digital or electronic markets where the goods or services are buying or selling via electronic networks.

 

• E-commerce Entities to Which The Act & Rules Applies-

The Consumer Protection Act 2019 or Rules of 2020 applies to-

• Market place E-commerce Entity– provides information technology platforms (websites and mobile applications).
• Inventory E-commerce Entity- these entities sell directly to consumers. It includes 1) single branch retailer or 2) multi-channel single branch retailer.
• E-commerce Retails
• E-commerce entity- which is established out of India, but supply goods or services directly to consumers of India.

 

• Rules of E-commerce Entity under ‘Consumer Protection (E-commerce) Rules 2020

• Every E-commerce Entity shall on its platform clearly mentions the name and address of the entity, website, contact details, and the name and contact details of the grievance officer.
• The E-commerce entity shall establish a grievance Redressal mechanism to deal with the issues of customers. And the name, designation, and contact details of such officer shall be put on the platform.
• Every e-commerce entity shall ensure that the grievance officer shall acknowledge the complaint of customers within 48 hours. He shall solve the problem within 30 days from the receipt of the complaint.
• If any entity deals with the imported goods and services, shall put the details of the importer on the platform.
• Every entity shall record the consent of consumers for purchasing of goods or services via explicit or affirmative actions.
• Any e-commerce entity must not discriminate consumers between the same class of consumers and also not to make any classification of the consumer on the basis of class.
• The e-commerce entity shall not impose the return charges unless the entity itself bears the charges.
• Any e-commerce entity shall not manipulate the consumers via imposing unreasonable prices.
• Every e-commerce entity shall not adopt any unfair trade practices.

 

• Seller’s Duties on a Market place e-commerce entity-

• The seller shall sign a contract in writing with the e-commerce entity for offering goods or services for selling and buying.
• Every seller shall appoint a grievance officer to solve the problems within 30 months.
• The seller shall ensure that the goods or services are the same as displayed in the advertisement.
• Every seller shall provide to the e-commerce entity for displaying on the platform of e-commerce entity-

1. Name, address, email, contact details, GSTIN and PAN number,
2. The total price of goods or services in a single list along with breakup price.
3. All the notices and information regarding goods as per law and expiry of goods and services.
4. If the goods are imported- the name of the country of origin, authenticity, and genuineness of imported goods.
5. All the information regarding a return, refund, and exchange policy.

• The seller shall not adopt any unfair means of trade.
• He shall not himself put reviews on goods.
• The seller shall not deny returning or exchanging the defective goods or services.

 

• Grounds of Filing Of Complaints-

The consumer can file the complaint against the trader or service provider to the District Commission or State Commission. The grounds are as follows:

• If the goods or services are defective of faulty or for charging an excess price
• If the goods or services are hazardous to the life of the public. And, if the trader or service provider withholds such information deliberately that may cause injury or loss to the customer.
• If the trader or service, the provider adopts any means of deceptive or unfair trade practices. Deceptive or unfair trade practices include-

1. Making false statements about goods.
2. Not returning cash or exchanging goods in case they are defective.
3. If any consumer shares his personal information with the seller in confidence, the disclosure of such information is an offence.

• The action against the defective goods or deficiency of services shall lie against-

1. Product Manufacturer or
2. Product Seller or
3. Service Provider, and liable to pay compensation to the consumer for the loss and harm caused.

 

• Central Consumer Protection Authority (CCPA)

The Consumer Protection Act of 2019 provides the establishment of CCPA. The authority will deal in matters-

1. Violation of the right of consumers
2. Unfair trade practices or
3. Misleading or false advertisements

After the investigation, the authority can pass the order-

1. For recalling or goods or withdrawal of services that are dangerous to health and safety.
2. In the case of false advertisement, discontinuation of such advertisement.
3. Stopping unfair trade practices
4. Reimbursement of prices
5. The authority can impose the penalty of 10 lakhs and 50 lakhs on subsequent instances.

 

• Punishment for Contravention of ‘Consumer Protection (e-commerce) Rules 2020:

1. If any person contravenes the order of CCPA, he shall be punished with 6 months imprisonment or fine up to 20 lakhs Rs or with both.
2. The punishment for false or misleading advertising is 2 years imprisonment or 10 lakhs Rs fine or 5 years of imprisonment or 50 lakhs Rs fine on Subsequent Instances.
3. The punishment for the adulterant goods is Life Imprisonment and fine not less than 10 lakhs.

Read more blogs @ advocatetanwar.com