E commerce laws and protection under consumer forum

E commerce laws and protection under consumer forum

By- Ananya Yadav

What is e commerce?

E-Commerce or Electronic Commerce means buying and selling of goods, products, or services over the internet. E-commerce is also known as electronic commerce or internet commerce. These services provided online over the internet network. Transaction of money, funds, and data are also considered as E-commerce. Online stores like Amazon, Flipkart, Shopify, Myntra, Ebay, Quikr, Olx are examples of E-commerce websites.

Common Problems in E-commerce

The common complaints received related to e-commerce are as follows:

• Defective or wrong product delivery;
• Refusal to replace wrong product delivered;
• Refusal or delay in refunding of money transferred for online purchase;
• Unreasonable delay in delivery of products purchased online;
• Issues regarding guarantee and warranty of products purchased online;
• Risky exposure of sensitive personal information shared for online transactions;

Such issues get difficult to tackle in the absence of any concrete legal remedy in the event of disputes.

International guidelines

International Organisations like the Economic Cooperation and Development (OECD) has laid out international guidelines to be followed regarding e-commerce.

Some of the important guidelines are as follows:

1. Consumers who participate in e-commerce should be afforded transparent and effective consumer protection that is not less than the level of protection afforded in other forms of commerce.
2. Businesses engaged in e-commerce should pay due regard to the interests of consumers and act in accordance with fair business, advertising and marketing practices as well as the general principle of good faith.
3. Businesses should not attempt to restrict a consumer’s ability to make negative reviews, dispute charges, or consult or file complaints with government agencies and other complaint bodies.
4. Businesses should not make any representation, or omission, or engage in any practice that is likely to be deceptive, misleading, fraudulent or unfair. Businesses should not misrepresent or hide terms and conditions that are likely to affect a consumer’s decision regarding a transaction.
5. Online disclosures should be clear, accurate, easily accessible and conspicuous so that consumers have information sufficient to make an informed decision regarding a transaction.
6. Businesses engaged in e-commerce with consumers should make readily available information about themselves that is sufficient to allow, at a minimum.

• identification of the business;
• prompt, easy and effective consumer communication with the business;
• appropriate and effective resolution of any disputes that may arise;
• service of legal process in domestic and cross border disputes; and
• location of the business.

7. Businesses engaged in e-commerce with consumers should provide information describing the goods or services offered that is sufficient to enable consumers to make informed decisions regarding a transaction.
8. Businesses engaged in e-commerce should provide information about the terms, conditions and costs associated with a transaction that is sufficient to enable consumers to make an informed decision regarding a transaction. Consumers should be able to easily access this information at any stage of the transaction.
9. Businesses should provide consumers with an opportunity to review summary information about the good or service, as well as any delivery and pricing information before consumers are asked to confirm a transaction. They should enable consumers to identify and correct errors or to modify or stop the transaction, as appropriate.
10. Businesses should provide consumers with easy-to-use payment mechanisms and implement security measures that are commensurate with payment-related risks, including those resulting from unauthorised access or use of personal data, fraud and identity theft.
11. Consumers should be provided with meaningful access to fair, easy-to-use, transparent and effective mechanisms to resolve domestic and cross-border e-commerce disputes in a timely manner and obtain redress, as appropriate, without incurring unnecessary cost or burden.
12. Businesses should provide redress to consumers for the harm that they suffer as a consequence of goods or services which, for example, are defective, damage their devices, do not meet advertised quality criteria or where there have been delivery problems.
13. Businesses should protect consumer privacy by ensuring that their practices relating to the collection and use of consumer data are lawful, transparent and fair, enable consumer participation and choice, and provide reasonable security safeguards.
14. These universally accepted guidelines provide a legal framework to go by in the absence of particular laws regarding e-commerce consumer protection.

Indian laws

In India, the interests of the consumers and their rights are protected by the Consumer Protection Act, 1986. The purpose of this act is to ensure that all customers get what they deserve or are promised. It ensures that the consumers aren’t cheated by enterprises by checking unfair trade practices, defects in goods and deficiency in services in India. Its jurisdiction extends to all services, products or suppliers in the public or private sector including banks, education, life and general insurance, health services, retailers etc.

According to Section 2(1)(d) of the Consumer Protection Act, a ‘consumer’ is any person who buys or hires any goods or services for a price. According to Section 2(1)(b), a ‘complaint’ can be filed by:-

1. A consumer;
2. The legal heir or representative of a consumer in case of the consumer’s death;
3. A group of consumers having the same concern;
4. A voluntary consumer association;
5. The Central or State governments.

According to Section 2(1)(c) of the Act, a ‘complaint’ or allegation can be filed on the following grounds:-

1. Unfair or restrictive trade practise adopted by any trader;
2. The goods bought or agreed to be bought being defective;
3. The services hired or availed or agreed to be hired or availed being defective;
4. Charging prices exceeding a fixed price for goods or services;
5. Goods being hazardous to life and safety.

Hence, the consumers can file complaints on the above grounds under the Indian Consumer Protection law.

Consumer protection in e-commerce

The Indian Consumer Protection laws, backed by the International guidelines are able to protect consumers in e-commerce even in the absence of explicit laws concerning online transactions. In this respect, the person making the purchase or transaction online would qualify as the consumer and would be able to bring a suit against any online shopping portal as the dealer under any of the above mentioned grounds.

The court to which a consumer is supposed to apply depends on the amount of claim and the geographical position as follows:

1. Amount of claim:
2. If the amount is less than Rs. 20 Lakh – District Consumers Forum.
3. If the amount is more than Rs. 20 Lakh & up to Rs One crore – Consumer Disputes Redressal Commissionof the concerned State;
4. If the amount is more than Rs. One crore – National Consumer Disputes Redressal Commission New Delhi.

1. The area of jurisdiction:

When applying to a District Forum, the court should have local jurisdiction over either:

1. The place of residence of one of the opposite parties;
2. The area of business of one of the opposite parties;
3. The place where the cause of action arises.

Since most shopping portals have offices in all cities, the consumer, in this case, would have to apply to the court with jurisdiction where the cause of action arose.

The new Consumer Protection Bill, 2015 provides for new laws related to e-commerce and hence will be of great assistance to consumers, once adopted, as they would have explicit and concrete laws to rely on for their protection of rights as a consumer along with their safety and privacy.