NATIONAL SEMINAR ON E-CONSUMERS PROTECTION PROBLEMS AND

PERSPECTIVES

SUB THEME MEASURES AND SAFEGUARDS FOR E-CONSUMERS

PAPER PRESENTATION AND PUBLICATION - TITLE OF THE PAPER

ONLINE BUYERS: A DARING GAME

SUBMITTED

BY

Mrs. JYOTHI K. M

ASSISTANT PROFESSOR

BISHOP COTTON WOMENS CHRISTIAN LAW COLLEGE

BENGALURU.

Mob No. - 9844341699, Email- jyothikm1982@gmail.com

AND

Ms. VAISHNAVI. P

STUDENT 4th Year BBA.LLB, 5 Years Course

BISHOP COTTON WOMENS CHRISTIAN LAW COLLEGE

BENGALURU.

Mob No. 8147620284, Email vaishnavi.p.naidu@gmail.com

 ONLINE BUYERS: A DARING GAME
Mrs. Jyothi K M* and

Ms. Vaishnavi. P**

ABSTRACT

The internet has become a channel where online transactions have been done. This created the need for
companies to understand how consumers perceive online buying. E-commerce (online shopping) is constantly
growing with new innovations and technologies, and many businesses are entering the world of online markets.
Online shopping can be determined as activity that deals with selling of goods and services through the Internet.
For businesses, it is important to be aware of how consumers perceive online purchases. In this present
scenariol, the concept of e-commerce is gaining more importance than traditional business. And in E-
Commerce, the online buyers play a vital role. The society is now in such a situation, that buying and selling
online is considered to be a day to day transaction and they rely on the online buying to eradicate many of
obstacles of traditional buying. Even though this concept has gained importance, there are certain problems
faced by online buyers. Online buyers are to be safeguarded and the problems which prevail in online buying
should be taken care of. Though there are acts present in our country speaking about the consumers and other
related aspects, we do not have any specific law with regard to the measures and safeguards of online buyers.
Only if we address this issue, the concept of E-Commerce can be used to the fullest extent and this will
contribute to the countrys growth.
Keywords: E-Consumers, Safeguards to Consumers, Online Buyers.
INTRODUCTION

The internet has played a very significant role in everyones life. E-Commerce has grown by leaps and bounds.
It also includes the entire online process of developing, marketing, selling, delivering, servicing and paying for
products and services. India has shown tremendous growth in the E-commerce segment. With an internet user
base of over 300 million, India has third largest internet population after US & China. 1 This scope of E-
Commerce has made business interactions easier and quicker all over the world. Because of this success of E-
Commerce there are many new start-up Entrepreneurs who have attained success in the E-Trade and E-Services
sector. In E-Commerce the goods ordered, and delivery is done ultimately on door delivery basis either freely or
with minimal costs and the payment and bookings are done with wide options both online and off-line . After
the advent of internet websites like ebay.com, amazon.com, flipkart.com, direct communication between

*Assistant Professor, Bishop Cotton Womens Christian law College, Bengaluru.

**Student, Bishop Cotton Womens Christian law College, Bengaluru.
1
https://www.linkedin.com/pulse/e-commerce-india-scope-challenges-future-shantanu-gaur.
manufacturers and consumers is just a mouse click away. 2 Whereas all these E-Commerce sites have high
competition within themselves due to which the online buyers derive several benefits, be it lower prices of the
product or the option to choose what they want, how they want, when they want, and where they want their
product delivered anywhere across the world.

Consumer protection within domestic markets is no doubt a well established concept. But the same does not
hold in the international realm. The OECD in its recommendations concerning Guidelines for Consumer
Protection in the Context of Electronic Commerce adopted in 1999, rightly identified E-Commerce as being
Inherently International in Nature. PerGertner J in Digital Equipment Corporation Vs. Alta Vista
Technology,3 The Internet has no territorial boundaries.as far as the internet is concerned , not only in
there perhaps no there, the there is everywhere there in internet access. The potential of the internet to
create a virtual borderless market has made the conventional territorial-based laws governing consumers in
India incompatible with the non-territorial nature of e-transactions. 4 Thus the feasibility of operations that
online transactions have bought about to the Indian trade industry and other transactions is remarkable.5

CONCEPT OF E-COMMERCE

E-Commerce has not been specifically defined in any Consumer legislation. In general parlance it is defined as
activities that relate to buying and selling of goods and services over the internet. It may be now that online
shopping has become popular but the concept of E-Commerce was introduced long back in the 20th century.

Thus, in the case of buying and selling of products or services on the virtual electronic world the buyer is
known as e-buyer, the seller is known as e-seller, the retailer is known as e-retailer, the consumer is known as e-
consumer and the transaction is known as e-transaction. Due to ease in transaction the number of e-consumer is
growing at high rate and within a very short period it will defeat the number of physical consumers. Though the
online buyers are Walking on Air with the most feasible access to E-Trade and E-Services, the sad reality on
the other side of the coin is that even with such increased scope, there is a disadvantage of entering into such
online transactions, due to the ambiguity in the laws relating to them6. There must be effective measures and
safeguards taken by the legislation to frame laws relating to e-commerce due to which not only the online
buyers are affected but also the state loses its revenue.

2
Anita A. Patil, The Era of E-Consumerism and issues concerned, Indian Bar Review, april-june, 2014.
3
960 F Supp 456 (D Mass 1997)
4
Dr. Ashok R. Patil, Associate Professor of Law, and Ms. Pratima Narayan, Research Scholar, of National Law School of India
University, Bangalore, E-Consumer Protection in India A Challenge, Karnataka Law Journal, 15th Jan, 2012.
5
Kanika Satyan, E-Commerce and Consumer Rights: Applicability of Consumer Protection Laws in Online Transactions in India, 2 nd
July, 2015.
6
Supra n.5
 MEANING OF E-CONSUMER

As e-consumer has not been defined in any of the Indian Legal Scenario due to which we take the shelter of the
term consumer from other Indian Statutes:

1. Section 2 in the Competition Act, 2002

(f) Consumer means any person who - (i) buys any goods for a consideration which has been paid or
promised or partly paid and partly promised, or under any system of deferred payment and includes any user of
such goods other than the person who buys such goods for consideration paid or promised or partly paid or
partly promised, or under any system of deferred payment when such use is made with the approval of such
person, whether such purchase of goods is for resale or for any commercial purpose or for personal use;

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly
promised, or under any system of deferred payment and includes any beneficiary of such services other than the
person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised,
or under any system of deferred payment, when such services are availed of with the approval of the first-
mentioned person whether such hiring or availing of services is for any commercial purpose or for personal use;

2. Section 2(1)(d) in the Consumer Protection Act, 1986

(d) consumer means any person who,

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or
under any system of deferred payment and includes any user of such goods other than the person who buys such
goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred
payment, when such use is made with the approval of such person, but does not include a person who obtains
such goods for resale or for any commercial purpose; or

(ii) 7 [hires or avails of] any services for a consideration which has been paid or promised or partly paid and
partly promised, or under any system of deferred payment and includes any beneficiary of such services other
than the person who 8 [hires or avails of] the services for consideration paid or promised, or partly paid and
partly promised, or under any system of deferred payment, when such services are availed of with the approval
of the first mentioned person 9 [but does not include a person who avails of such services for any commercial
purpose]; Thus we can come to the conclusion that, any person who does online purchase of goods and services
for personal use are known as E-Consumers.

7
Subs. by Act 50 of 1993, sec. 2, for "hires" (w.r.e.f. 18-6-1993 )
8
Ins. by Act 62 of 2002, sec. 2 (w.e.f. 15-3-2003 ).
9
Subs. by Act 62 of 2002, sec. 2, for Explanation (w.e.f. 15-3-2003 ). Earlier Explanation was inserted by Act 50 of 1993, sec. 2
(w.r.e.f. 18-6-1993 ).
 HISTORICAL ASPECTS OF E-CONSUMERS IN INDIAN SCENARIO:
The concept of Consumer Protection and ethical trade practices are traced from the Manu Smriti and Kautilyas
Arthasastra. Problems of adulteration, process of inspecting weights and measures and severe punishment for
fraud in selling seed corn were addressed. It describes the role of state in regulating trade and its duty to prevent
crimes against consumers.10 Consumer Protection continued to be of prime concern even during the medieval
period.

The British rule revolutionized the Indian legal system by bringing about unified nationwide modern legal
system. Some of the legislations that were passed during the British regime concerning consumer interests are
the Indian Contract Act, 1872, Sale of Goods Act, 1930, Indian Penal Code, 1860, Drugs and Cosmetics Act,
1940, Agriculture Procedure (Grading and Marketing Act), 1937, etc., of the enactments, Sale of Goods
Act,1930 was an exclusive source of consumer protection in India. Several legislations were enacted post-
independence.

The year 1991 noted a new chapter in the history of the online world where e-commerce became a hot choice
amongst the commercial use of the internet. At that time nobody would have even thought that the buying and
selling online or say the online trading will become a trend in the world and India will also share a good
proportion of this success.11

Online shopping started early in 1995 by the introduction of internet in India. Online shopping became popular
during the Internet boom in 1999-2000 with the well know auction site know as bazee.com. Soon amazon.com,
the online bookstore founded by Jeff Bezos, created history by becoming the first bookstore with a presence
only on the Internet. Later on following the success of Amazon, many other bookstores with a physical presence
also created an online presence on the Internet.12

PRESENT SCENARIO OF E-CONSUMERS IN INDIA

In 2002, India first came into interaction with the online E-Commerce via the IRCTC to book ticket online for
the public i.e., the online consumers. After the unpredicted success of the IRCTC, in 2003, the online ticket
booking system was followed by the airlines (like Air Deccan, Indian Airlines, Spice jet, etc.). Today, the
booking system is not just limited to the transportation rather hotel bookings, bus booking etc. are being done
using the websites like Make my trip and Yatra. The acceptance of the E-Commerce on a large scale by the
Indian people influenced other business players also to try this technique for their E-businesses and gain high
profits. Though online shopping has been present since the 2000, it gained popularity only in 2007 with deep

10
Supra n.5
11
http://www.iamwire.com/2014/07/e-commerce-in-india-past-present-future/27805
12
http://raijmr.com/wp-content/uploads/2015/07/5_24-33-Dr.-Sunil-Patel.pdf
discount model of Flipkart. In a way it re-launched online shopping in India. Soon other portals like Amazon,
Flipkart, Jabong, etc. started their businesses in India.13

There were online shopping sites for apparel, grocery, electronic gadgets, etc. Everything is available online
now, from a mobile phone to its screen guard. The E-Consumers were absolutely happy about these services as
there were a lot of product choices which allowed them to choose their own color, size, type, etc. Online
shopping is now a trend for all the E-Consumers in India to receive products tailor made to their requirements
with a lot of payments options at their doorstep.

Constitution - Article 14 which enshrines fundamental right to equality ensures equal bargaining powers to both seller
and buyer. Several public interest litigations have been initiated by consumer groups under Article 14 against companies
promoting misleading advertisements. Article 19(1) (a) which provides for fundamental right to speech and expression
largely governs issues of advertising and privacy concerns. Article 19(1) (g) guarantees every citizen the fundamental
right to carry out any trade profession or business at his pleasure. However, this right is not unfettered. Exercise of such
freedom to the detriment of public good and interest of consumers hinders the balance between individual liberty and
public good which is the essence of Article 19. Further, Article 21 of the Constitution requires the State, inter alia, to
protect life, which is construed as including right to live with dignity and not to be exploited. The Directive Principles of
State under Articles 38 and 39 of the Constitution, mandates that the State shall strive to promote the welfare of the
people by securing and protecting a social order in which justice social, economic and political shall prevail and directs
state policies to secure equal distribution of material resources and wealth as to best sub serve the common good.14

Indian Contract Act, 1872- Every transaction that is entered into, especially if it is of Business to Consumer form,
is fundamentally and for all effects and purposes an E-contract. The elementary and essential elements for the
formation of a contract as per Section 10 of the Indian Contract Act, 1872 are applicable to an electronic
contract as well, which is, in effect provided legal recognition by the provisions of Information Technology Act,
2000.In consequence both Consumer Protection and IT Act in concurrence grant legal recognition to the
concept of e-contracts.

Consumer Protection Act, 1986 - Consumer Protection Act, 1986 is the fundamental and principle Act that lies down and
guarantees rights to consumers. However, the law until recent times was ambiguous as to whether such provisions
would be applicable to online transactions. On July 8, 2014 the Minister of State for Consumer Affairs, Food and Public
Distribution, in a written reply in Lok Sabha made an announcement of including online transactions also in the ambit of
Consumer Protection Act, 1986. This fundamentally meant that complainants can approach various Consumer Forum.

13
Dr. Sunil Patel, Evolution of Online shopping in India & its Unparallel Growth, Associate Professor, United world School of
Business, April 2015, Ahmadabad, Gujarat.
14
Dr. Ashok R. Patil, Associate Professor of Law, and Ms. Pratima Narayan, Research Scholar, of National Law School of India
University, Bangalore, E-Consumer Protection in India A Challenge, Karnataka Law Journal, 15th Jan, 2012.
Information Technology Act, 2000 - Apart from the principle law for consumer protection, many other laws cover
online transactions. The Information Technology Act, 2000 is an attempt by the government to digitalize its
workings by making every piece of information available online and further ensuring that such transactions are
secured. Further, it provides for remedial measures like appointment of Controller- Section 17 of IT Act, 2000
and setting up a cyber Regulations Appellate Tribunal- Chapter X of IT Act, 2000 for penalizing the cyber
offences as laid under Section 43 to 47 of the Act.

The most significant characteristics of this Act, however still is that it provides legal recognition to electronic
records- Section 8 of IT Act, 2000. This legal recognition forms the foundation of all the e-commerce
undertaken by customers and also guarantees effective enforcement of the rights of consumers, if infringed.

In general, the consumer rights in India are listed below:15

1. The right to be protected from all kind of hazardous goods and services
2. The right to be fully informed about the performance and quality of all goods and services
3. The right to free choice of goods and services
4. The right to be heard in all decision-making processes related to consumer interests
5. The right to seek redressal, whenever consumer rights have been infringed
6. The right to complete consumer education

Consumers in e-commerce face a number of risks for two reasons16-

i. Lack of understanding of technicalities of the internet, and

ii. Legal issues which developing countries like India are still grappling to identify and incorporate in their
legal systems as internet trading is in its nascent stage.
Some of the common issues that arise in an online buying are17:

a. Is the company doing business a legitimate one and where is it located?

b. Does the business organization/individual offering product/ service provide appropriate information on
terms and conditions of the purchase such as instructions for use of products, warranties, cancellation,
flexibility in return / refund policies, availability of after-sale service etc.
c. Is the browser secure and does it encrypt personal and financial information during online transmission?
d. Does the browser provide comprehensive Privacy Policy Statement addressing the manner in which
the personal information of the customer would be used?
e. Is the business committed to customer satisfaction? What recourse is available for a quick and fair
resolution in case of consumer dispute?

15
http://www.consumerrights.org.in/rights.htm
16
Supra n.3
17
Ibid
 MEASURES AND SAFEGUARDS FOR E-CONSUMERS:

Based on the above information, we suggest the following measures and safeguards for e-customers.

1. ABSENCE OF KNOWLEDGE OF CONTRACT:

The present scenario in Indian system - as there is rapid, unrestricted growth in e-commerce, certain
measures has to be impllimented to overcome the obstacles that come with this growth. The main
obstacle to the protection of an e-consumer is the absence of knowledge of the contract entered into by
the customer with the e-commerce site.
The contract, in this context, is in the form of terms and conditions. However, only a meagre portion of
the customer base even bother to glance at it. Online buyers do not invest their time in understanding the
whole terms and conditions and end up just accepting it by clicking on I agree without reading. The
main constraint experienced by buyers in context of reading the terms mentioned is the sheer size and
presence of jargon in the document. In order to overcome this issue there must be an abridged version of
the terms and conditions available to the customer. This must be written in simple language which
allows easy understanding for the common man.
2. APPROPRIATE INFORMATION TO BE DECLARED BY THE E-RETAILER
The e-retailer must give very clear information about the product and make provisions for the e-
consumer to search products by category; brand, price range, dimensions, weight or size and the price
must be adjacent to the product in the catalog. The images that are put on the websites must be clear
color images of the product without any photoshop editing.
The availability of stock must be mentioned clearly. In stock and out of stock items must be put in
different categories. Special offers, coupons and discounts offered must be clear along with the cost, the
surcharge, VAT, other tax, and delivery charges in the product catalog itself.
3. FINAL TRANSACTION

The modes of payment are by credit card, debit card, net banking, coupons and cash on delivery. In
certain sites/ products there wont be an option of all the above mentioned modes due to which the e-
consumer will have a problem on shopping on that site or finding a particular product. Consumer
protection regulation should require e-retailers to provide consumers with a prompt confirmation of the
transaction as soon as an order has been placed. That confirmation should contain information
acknowledging that the order has been accepted , information regarding expected delivery time and
method used, as well as information regarding payment and applicable cancellation rights and
procedures. The confirmation should be printable and possible to store in electronic form.18

18
Dr. Shashi Nath Mandal, Protection Of E-Consumers Rights In Electronic Transaction.
 4. INSECURITY OF THE PRODUCT
Damage free products must be delivered to the e-consumers by proper packing and safe handling. If it is
not delivered properly it will disappoint the consumer abd would result in return of the product any also
makes them wait for a long time for the re-delivery or money back.
Additionally, there must also be trustworthy delivery boys who can handle the products safely.
5. PHISHING
Many fake sites exist which cheat people out of their hard earned money. Therefore reputable sites must
mention/ upload their authenticated certificates in order to prove their trustworthiness.
6. PRIVACY
As customers provide their credit / debit and bank details on e-shopping sites, adequate measures must
be taken to protect their information. We suggest provision for an OTP(One time password) every time a
customer accesses his or her bank information. This would ensure that their bank information would be
safeguarded and not be misused by fraudsters or other people who have access to their online accounts
on these sites.
7. PROBLEMS OF RETURN, EXCHANGE AND REFUND
While returning products, most products take a minimum of seven days for processing in itself, let alone
the actual exchanging of the product. This is not feasible in case of an emergency situation. Most online
products are bought due to an urgent need. If the product received is damaged or not up to the mark, it
creates an additional hurdle to the customer to go through the tedious process of exchange. Therefore,
there must be a simpler, more time efficient method of exchange and refunds.
The success of online buying by the online buyers are because it is very convenient to decide on what to buy
with numerous choices of color, type, etc., with the availability of almost all the brands with the higher
discounts rather than going to shops and bargaining, these online purchase are comparatively flexible. There is
apparel, groceries, electronics, interior products, kitchen items, bathroom products and items which are not
necessarily available in and around the customer's vicinity that can be delivered to their door stop at cheap
delivery charges. This is a much feasible option in comparison to the alternative, which is travelling long
distances to get that single product. The percentage of online buyers are rising everyday and there must be
safeguards by the Government for these rising numbers. The Government of Indian must pass legislations for
safeguarding the online buyers in all the possible ways so that they can be secured in their transactions.

CONCLUSION
Electronic commerce is booming. Online purchasing is in its essence like any other purchase of goods and services.
Consumer transaction online are entitled to the same protection as provided by the laws, regulation and practices that
apply to traditional transactions. The laws prevalent in India with respect to the rights of the consumers using the
electronic medium for sale and purchase of goods online are neither adequate nor of much use when it comes to tackling
urgent problems arising out of online transactions.

The only dilemma remains in the fact the Indian legal system does not cover the facet relating to consumer rights in case
of e-commerce. Thus the vital need of the hour is to provide for express declaration of laws that would make e-commerce
hassle free and this would in turn encourage more people to resort to commerce through the internet.