Consumer Protection

in E-Commerce
Unit 5
Consumer Protection Issues
Definition of a consumer
Rights of the Consumer
Legal Framework providing for these rights and protecting these rights
Issues in protecting these rights:
1. Redressal Mechanism and dispute resolution- COPA, 2019, Consumer
Protection Rules, 2021
2. Regulatory Mechanism for ensuring safety and protection of consumers
3. Data Protection and Privacy
4. Jurisdictional Issues
International Regulatory Frameworks

OECD Guidelines on Consumer Protection, 1999

Distance Selling Directives 1997- EU

Application in Real Life Situations
A goes to netmeds and orders medicines for treating cough and cold. He used an
old prescription for placing the order. The orders were placed but the medicines
were about to expire in two days. He raises a complaint with netmeds but did not
receive any response. However, he consumes the medicines and later on faced
complications due to the interaction of the medicines with his medicine for blood
pressure.
He wants to file a case against netmeds.
Is he a consumer?
Which are the consumer rights violated ?
Can netmeds claim exemption from liability?
Application in Real Life Situations
B, a pure vegetarian, ordered food through Zomato. He ordered a veg sandwich
and spring rolls. When started eating, he realized that it had egg in it and the
drinks ordered were not sealed cans. When he raised a complaint, the website
claimed that as per Clause XIII 1. F of the terms of use, they are not liable and ask
B to contact the Restaurants.

How would B get redressal?

Is any of B’s rights violated?

Is there any remedy available?

Applicable Laws
Consumer Protection Act, 2019- who is a consumer, rights of the consumer

Indian Contract Act, 1872- contractual liability, privity of contract

Sale of Goods Act, 1930- Standards to be met while selling goods

Definition of E-Consumer- Sec 2 (7) Consumer Protection Act, 2019

Purchaser and users of goods

Hire and avail services

Does the definition include

1. OLA cabs
2. Amazon Free deliveries
Dispute Redressal Mechanism
Should the contract decide the mechanism

Cause of Actions

● Defect in product and deficiency in services

● Unfair trade Practices
● Product Liability
● False Advertisements
● Incomplete information
Consumer Protection (E-Commerce) Rules 2020
Definition includes E-commerce Marketplaces within the scope of application
Rule 5 E-commerce entities are :
Required to provide information to consumers, 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 and country of origin.

Acknowledge the receipt of any consumer complaint within 48 hours and redress the complaint within one month
from the date of receipt. They will also have to appoint a grievance officer for consumer grievance redressal.

Sellers cannot refuse to take back goods or withdraw services or refuse refunds,if such goods or services are
defective, deficient, delivered late, or if they do not meet the description on the platform.

The rules also prohibit the e-commerce companies from manipulating the price of the goods or services to gain
unreasonable profit through unjustified prices.
Consumer Protection Dispute Redressal commission Rules, 2020

It came into force on 20th July 2020, the amount of fee payable for filing the complaint in the
District Commission up to Rs 5 lakhs has been made Nil according to Rule 7.

The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare
Fund(CWF).
Concerns of data protection and Privacy

❏ Opt-In and Opt out approach- User consent

Personal Data Protection Bill, 2019 and Right to Privacy under Art
21
❏ Ownership of data- data provider as the owner
❏ Classification of data- Sensitive, Critical and General
❏ Sensitive and Critical- Data Localization
Indian Contract Act, 1870

Performance of the Contract- When to perform? What amounts to performance?

Dispute redressal clause- principles of standard form contract apply, law and
mechanism
Sale of Goods Act, 1930
Essentials-

● Bilateral
● Goods
● Money Consideration
● Transfer of General Property
● Satisfy the essential elements of a valid contract

Conditions and Warranty - Difference between the two

Consumer protection Cases
Deficiency in services availed online

Anupama Purohit vs Makemy trip.com

Spice Jet vs Ranju Aery, 2017

False Advertisements

People vs Lipsitz

Minnesota vs Granite Gate Resorts

Cases
Horlicks Ltd. v. Zydus Wellness Products Ltd., 2020 SCC OnLine Del 873
The High Court passed an interim order restraining Zydus from telecasting its advertisement comparing Complan to
Horlicks on the grounds that the same was misleading and disparaging. The Court relied on various judgments on
misleading advertisements, disparagement and law governing publication of advertisements on television

Dabur (India) Ltd. v. Colortek (Meghalaya) (P) Ltd., 2010 SCC OnLine Del 391
The Delhi High Court culled out the principles governing disparagement in the advertisements and held:
On the basis of the law laid down by the Supreme Court, the guiding principles for us should be the following:
(i) An advertisement is commercial speech and is protected by Article 19(1)(a) of the Constitution.
(ii) An advertisement must not be false, misleading, unfair or deceptive.
(iii) Of course, there would be some grey areas but these need not necessarily be taken as serious representations of fact
but only as glorifying one’s product.
To this extent, in our opinion, the protection of Article 19(1)(a) of the Constitution is available. However, if an advertisement
extends beyond the grey areas and becomes a false, misleading, unfair or deceptive advertisement, it would certainly not
have the benefit of any protection.
OECD Guidelines, 1999

⚫ Set of recommendations to governments, businesses,

consumers and their representatives

⚫ Applicable only to B2C E-Commerce

OECD General Principles
1. Transparent and effective protection
2. Fair Business, Advertising and marketing practices
3. Online Disclosures- business, goods and transactions
4. Confirmation process- when will the contract be concluded?
5. Payment Methods
6. Dispute Resolution
7. Privacy and data protection
8. Education and consumer awareness
E-Commerce Directive on Distance Selling 1997

Distance selling

Sale and purchase of goods/services where a consumer and

a supplier running an organised distance-selling scheme
do not meet face to face at any stage until after the
contract has been concluded.
Rights of a consumer in distance selling contracts

⚫ Provision of comprehensive information before the purchase-

Art.4

⚫ Confirmation of most of that information in a durable

medium (such as written confirmation) and some additional
information which becomes relevant after the sale- Art. 5

⚫ Right of withdrawal- within 7 working days- Art.6

Rights of a consumer in distance selling contracts
⚫ Where the consumer has cancelled the contract, the right to a refund within 30 days of
cancellation;

⚫ Delivery of the goods or performance of the service within 30 days of the day after the
consumer placed his/her order;

⚫ Art. 10 – Data Privacy

⚫ Non validity of any waiver of the rights and obligations provided for under the Directive,
whether instigated by the consumer or the supplier.
Exempted Contracts
⚫ Contracts for Financial Services

⚫ Contracts concluded through online auctions

⚫ Contracts for perishable goods/custom made goods- no right to

withdrawal

⚫ Contract for performance on a specific date- no right to withdrawal

Drawbacks

⚫ Non-uniform legal sanctions

⚫ Non-uniform cooling off period

⚫ Online auctions not covered

Gentry vs E-Bay 2002

⚫ liability of eBay
⚫ court held

⚫ “eBay was not responsible for the goods that are listed in
the website since they act only as the facilitator and not
as the seller, and that the auction site did not guarantee
that the goods listed were of genuine, which is the role of
the actual seller.”
E-Commerce Directives on Consumer Rights, 2011
Art. 3- Scope and Application

Art. 6 Information to be disclosed to the consumer

Art. 9 Right to withdrawal

Art 18- Delivery within 30 days

Art 19- Consumer not to charged excessive fee