E- COMMERCE AND CONSUMER LAW

E-Commerce in India brought a leading change in the life style of Indian consumer with the entry of on line retailer Amazon and online auctioneer e Bay in late 1990’s.Thereafter innovative steps were initiated by the business groups to go further with their business promotion by making use of web for advertising their products .The scenario further changed with the use of social networking  which brought a remarkable flow of online purchases after the year 2006.The picture as on date is that number of modes are in operation for on line purchases through out the country.

WHAT IS E-COMMERCE

Anita Rosen from an American management association in her book on e-commerce explains e-commerce as a practice of purchasing and selling products and services over the internet or other electronic system .Electronic commerce or e commerce refers to on line business activities. It also pertains to any form of business transactions in which parties are not physically present and interact electronically. .Digital information technology is the mode of communication in such business. The World Trade Organization on September 25^th1998 had adopted a broad view of electronic commerce as ‘the production, distribution, marketing sale or delivery of goods and services by electronic means – (By Mitchel Andrew.D)

Individuals connecting to the web is the first important factor / mode of access for the consumer to the market which has increased E-Commerce five fold after 1990’s in India.The new breakthrough in the traditional way of business has completely changed the traditional business of trading patterns. Broadband and growing use of mobile devices is another reason facilitating the general public at large to opt for net marketing  The presence of e –retailer such as Amazon and Bricks and Mortar, is another important factor influencing e commerce activities.Consumers are equipped with a powerful tool for searching and buying goods and services.Increased competition leads to lower price,more choices of products and convenience of shopping from vendors located around the world.It is an ease and speed shopping. And now we see consumers are able to shop or conduct their transactions 24 hours a day and also track the delivery status of their purchase .Comparing prices is a great benefit .

                       But now the question before is as to whether existing law concerning consumers are                                      adequate for consumer safety,information option,fair trade rights ,claims and other  rights.

WE may refer here to The Economic and Social Council of the United Nations, who had set model guidelines on consumer protection which were adopted by the General Assembly in 1985 recognizing the need for protection of the rights of consumers. With the change of scenario today United Nations Conference on Trade and Development has undertaken a revision of the UNGCP. Consumers International, an international consumer rights organization has along with CIS and other groups been trying to represent the voice of consumers. Consumers International has produced a book titled "Updating the UN Guidelines for Consumer Protection for Consumers in the Digital Age

 In December 2012 there was a news report that the marketfor online commerce in India is at roughly USD 14 billion. , Flipkart alone had a valuation of around USD 800 million. Such huge numbers give a sneak peek into the size and scope of the Indian e-commerce market place which begs the question- when there are so many transactions occurring in the online marketplace and since a large number of those transactions are between retailers and domestic consumers, are there any specific laws out there protecting the interests of consumers in the online world.

CAG (Citizen Consumer and Civic Action Group) also focused on this issue to see if the websites were consumer friendly and also to see if there were adequate laws and redressal mechanisms in India to protect consumers shopping online. CAG, took a study, ‘E-commerce and Consumer Protection in India’ in 2002, to look at e-trading websites and how consumer friendly they were. In 2006, CAG conducted a follow up study ‘Protecting consumer rights in e-commerce transactions’ to look at laws and redressal mechanisms available to consumers. This study brought to light a number of issues such as privacy of information, provision of contract terms such as guarantees/warrantees, refunds, dispute settlement, hidden costs and misleading information and other problems.

Addressing the audience at a seminar on ‘E-Commerce And The Consumer Responsibilities and Rights’ organized by the Consumers Association of India, Secretary, Ministry Of Consumer Affairs  Sh. Desurajuhe said it is  essential to create a policy framework and regulatory environment that favours the development of e-commerce and ensures protection of consumers.

Experts say the Consumer Protection Act 1986 does not have any specific law to regulate online transactions. S Gopalakrishnan, Commissioner, Civil Supplies and Consumer Protection, Government of Tamil Nadu, too reiterated the need to amend the act suitably so that it takes within its jurisdiction all kinds of consumer transactions, as each situation needs a different set of tools to handle.He also highlighted the need to amend the Information Technology Act to prevent misuse of any personal information, and also to reduce the existing information irregularity

 CEO Akosha, Ankur Singla, revealed that out of the 11980 complaints received by Akosha for e-commerce in the first quarter of 2013, almost 58 percent related to deficiency in delivery (such as delivery of damaged goods, delivery of a different product or non-delivery of goods, even after the payment has been made), 29 percent were for refund of money for non-satisfactory products, while the rest had different concerns.

Hence this is the issue specifically being considered in forthcoming Amendment to the Consumer Protection Act.

 AVAILABLE LAWS

REGARDING TRANSACTION ON NET AND ITS RECOGNISION

Information Technology Act, 2000 has done a big deal in giving recognition to online purchases. Reserve Bank of India  by issuing various circulars  regarding online banking and moneytransfer activities have made consumers  capable of securing  the online space. It’s true that as a whole, there are no specific laws that seek to protect consumers in the online space. However, that does not necessarily mean that the consumers are left without any recourse and in this regard we shall examine whether it is possible to use the Consumer Protection Act, 1986 to protect consumer rights in the online environment as well.

While looking into the present frame work of Consumer Protection Act, we find enough scope to make use of this law with the same strength as is done purchases in physical presence with a little careful dealing.

·         VALIDITY OF E-CONTRACTS –Electronic contracts are governed by the basic principles provided in the Indian Contract Act, 1872 ("ICA"), Section 10A of the Information Technology Act, 2000 ("IT Act") provides validity to e-contracts The Supreme Court in Trimex International FZE Ltd. Dubai v. Vedanta Aluminum Ltd. has held that e-mails exchanges between parties regarding mutual obligations constitute a contract.

·         JURISDICTION POINT The other crucial issue is the consent and the way offers are accepted in an online environment. In a click wrap and shrink wrap contract, the customers do not have any opportunity to negotiate the terms and conditions and they simply have to accept the contract as is offered to them before commencing to purchase. Section 16(3) of the ICA provides that where a person proposes certain terms to the other and other part accepts the same by clicking on it, is bound by all the terms so proposed by the proposer. It is said and argued by some groups that under these online environments, party offering is in a position to dominate the will of another, and the transaction appears on the face of it to be unconscionable. Hence this is a disadvantageous position of a person who accepts. But we must not forget that the basic principal of contract act is that acceptance should be unconditional even if both the parties are present face to face. So it hardly makes any difference as far as acceptance of proposal is concerned. One can always avoid clicking if not satisfied. The only point while dealing the matter under Consumer Protection Act shall have to be decided is the jurisdiction of the court keeping in view the question –where the cause of action arises. In net purchasing, since proposal and acceptances are made on computer sitting at their places, jurisdiction at both the places has been considered by the forums /commissions under Consumer Protection Act as practiced by now and supported by various judgments too. Hence consumers can easily reach to consumer forums in cases of default on the part of seller or service provider.

·         DATA PROTECTION: Security of the information provided during the online transaction is a major concern. Under section 43A of the Information Technology (Intermediaries Guidelines) Rules, 2011, the intermediaries have the obligation to publish the rules and regulations, privacy policy and user agreement for access or usage of the intermediary's computer resource by any person. Such rules and regulations must inform the users of computer, display, upload, modify, publish, transmit, update or share information. Also, the intermediary must not knowingly host or publish any prohibited information and if done, should remove them within 36 hours of its knowledge. In Consim Info Pvt. Ltd v. Google India Pvt. Ltd, the Delhi Court Google had extended the argument that being search engine, they cannot control the fact whether some website, any advertisement given on their site is genuine or fraud. The court then observed that though the intermediary, Google, cannot be made liable for infringement arising out of a third party's actions since it is not possible to always check every advertisement posted online; however, it was said that as per section 3(4) of the aforesaid Intermediaries Guidelines, Google had to act upon it within 36 hours of receipt of such complaint, failing which it may be held liable.

                  This issue is also in no way different from the issues time and again raised by the public at large in other than e-commerce when their phone numbers are given by banks etc. for tale MARKETING and other unwanted calls and SMS from business groups. This issue can very well be handled alleging the wrong doer for deficiency in services and unfair trade practices under Consumer Protection Act.  

·         STAMPING OF CONTRACTS is yet another issue. An instrument that is not appropriately stamped may not be admissible as evidence unless the necessary stamp duty along with the penalty has been paid. However, as the payment of stamp duty has gone online and e-stamp papers are available, it can become a possibility that stamp duty might be asked on e-contracts as well

·          ADVERTISING: Advertising is an important and legitimate means for a seller to awaken interest in his products. Absence of a single comprehensive legislation in terms of a proper code to follow by the industry and the authority to regulate or guide the pattern of advertising is till date a problem. In 1985, the Advertising Standards Council of India ("ASCI"), a non statutory body, was established that created a self regulatory mechanism of ensuring ethical advertising practices. ASCI entertained and disposed of complaints based on its Code of Advertising Practice ("ASCI Code").But this does not have authority to punish anyone .Amendment in the consumer protection act 2002 had added a clause unfair trade practice which is specifically meant for misleading ads and works well on e-commerce purchases also .  

While Consumer Protection Act 1986  is already on way to be amended suitably after earlier three amendments, Consumer is also bound to take adequate care while dealing with net and making purchases on line in his own interest .

 DUTY OF A CONSUMER WHILE DEALING ON WITH E COMMERCE

1.      TO GET INFORMATIONABOUT THE COMPANY: What kind of business it is and what it sells. Where the company is located, including the country. How the          company can be contacted.

2.      FIND OUT WHAT THE E-MERCHANT'S PRIVACY POLICY is Use your credit card rather than your debit card to make your e-transaction. Find out what the e-merchant return and refund policies, before placing any orders.

3.      KEEP YOUR PERSONAL INFORMATION PRIVATE. Do not disclose your address, telephone number, social security number, or your e-mail address unless you know who is collecting the information and how it will be used.

4.      SHOP ONLY WITH KNOWN E-MERCHANTS and always use a secure browser. Make sure that your browser complies with the industry security standards; anyone can set up a Web site offering something for sale. If you are not familiar with the e-merchant, ask that you be sent a paper catalog or brochure to get a better idea of the type of merchandise the company offers.

5.      REVIEW YOUR MONTHLY BANK AND CREDIT CARD statement promptly and thoroughly in order to find and billing errors, or unauthorized charges or withdrawals

Dr Prem Lata

 

 

 

 

                        

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