To strengthen the provisions for consumer protection, especially in the new era of globalisation, online platforms, e-Commerce markets, etc., the Consumer Protection Act, 2019 was enacted to replace the Consumer Protection Act of 1986.
It provides for improved protection for consumers involved in online transactions. The Consumer Protection Act 2019 has widened the scope of the definition of ‘consumer’ to include persons who buy or avail of goods or services online or through electronic means, which was not present in the Consumer Protection Act of 1986. The Consumer Protection Act 2019 has also included a definition of advertisement as any audio or visual publicity, representation, endorsement or pronouncement made by means of, inter alia, electronic media, the internet or a website.
The CCPA has notified the Guidelines for Prevention of Misleading Advertisements and endorsements for Misleading Advertisements, 2022, on 9 June 2022 with the objective of curbing misleading advertisements and protecting the consumers who may be exploited or affected by such advertisements. As per these guidelines, due diligence is required for endorsement of advertisements so that any such endorsement in an advertisement must reflect the genuine, reasonably current opinion of the individual, group, or organisation making such representation and must be based on adequate information about, or experience with, the identified goods, product, or service and must not otherwise be deceptive. Further, these guidelines state that where there exists a connection between the endorser and the trader, manufacturer, or advertiser of the endorsed product that might materially affect the value or credibility of the endorsement and the connection is not reasonably expected by the audience, such a connection shall be fully disclosed while making the endorsement.
The CCPA has issued advisories to, interalia, e-commerce companies to desist from manufacturing, selling, or listing products or services that are dangerous to the lives of consumers which included the sale and listing of car seat belt alarm stopper clips, the illegal sale, and the facilitation of wireless jammers.
It has also advised all marketplace e-commerce platforms to display information provided by sellers as per the e-Commerce rules, 2020. CCPA has also issued two safety notices cautioning consumers against buying goods that do not hold a valid ISI Mark and violate compulsory BIS standards, such as helmets, pressure cookers, and cooking gas cylinders, and other household goods, including electric immersion water heaters, sewing machines, microwave ovens, domestic gas stoves with LPG, etc.
The Consumer Protection Act 2019 explicitly includes e-commerce transactions within its scope, defining e-commerce as the buying or selling of goods or services, including digital products, over a digital or electronic network.
To safeguard consumers from unfair trade practices in e-commerce, the Department of Consumer Affairs has already notified the Consumer Protection (e-commerce) rules, 2020, under the provisions of the Consumer Protection Act. These rules, inter-alia, outline the responsibilities of e-commerce entities and specify the liabilities of marketplace and inventory e-commerce entities, including provisions for customer grievance redressal.
There is an emergence of unfair trade practices known as ‘dark patterns’, which involve using design and choice architecture to deceive, coerce, or influence consumers into making choices that are not in their best interest. The Department of Consumer Affairs has urged e-commerce companies, industry associations to refrain from indulging in any design or pattern in the online interfaces of their platforms that may deceive or manipulate consumer choices and fall into the category of dark patterns.