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The Indian consumer protection framework received a much-needed
overhaul with the Consumer Protection Act, 2019
("COPRA") receiving the presidential
assent on August 9, 2019. The new COPRA will set up a new consumer
grievance redressal body known as the Central Consumer Protection
Authority, invested with wide-ranging powers, including search,
seizures and summons and seems a step towards aligning Indian
consumer protection laws with the global developments in this
space.
Whilst hitherto e-commerce platforms/ online aggregators had the
"intermediaries" defence, a key change has been to
include such intermediaries under COPRA!
Even though COPRA broadly retains the definition of who is a
'consumer' (from the 1986 Consumer Protection Act), it has
introduced a new 'explanation' providing that when a
consumer 'buys any good' and 'hires or avails of
any service' this includes "online transactions
through electronic means...", potentially bringing
e-commerce platforms/ aggregators within the new COPRA.
'E-commerce' is defined as "buying and
selling of goods/ services, including digital products over the
digital/ electronic network" and an 'electronic
service provider' means "a person who provides
technologies/ processes to enable a product seller to engage in
advertising/ selling goods/ services to customer and includes
online market place."
Hence, potentially not just online marketplaces, but other
digital aggregators may also come within the purview of the new
COPRA going forward. Absent a carve-out for online aggregators,
this is likely to raise multiple interpretations as regards the
applicability of the new COPRA for the digital industry and is one
more step towards "tech-regulation" by the Indian
Government. Potential issues could range from the applicability of
COPRA to offshore online aggregators available to consumers in
India, extra-territorial application, enforcement issues and a
potential "nudge" in future towards "onshoring"
of operations/ entities, as has happened with the new Indian IT
Intermediaries Regulations, proposed e-commerce policy (framed by
DPIIT earlier this year), RBI OPGSP Guidelines, etc.
COPRA has also introduced the concept of 'product
liability', defined as "responsibility of a product
manufacturer/ seller (including electronic service providers), of
any product or service, to compensate for any harm caused to a
consumer by such defective product manufactured or sold or
by deficiency in service". It would be interesting to
assess the implications of the above on e-commerce platforms,
adding another layer of compliance for them.
COPRA also requires electronic service
providers to provide the District Consumer Disputes
Redressal Commissions with documents, information or records in
relation to any complaint received regarding any goods or services,
including unfair trade practices (which covers sharing of personal
information given by the consumer in confidence) alleged by
consumers.
All notices under COPRA maybe served on an electronic service
provider at the address provided by it on an electronic platform
from where the services are provided. It is the duty of an
electronic service provider to designate a nodal officer to accept
and process the notices received under COPRA. Though there is no
requirement for such "nodal officer" to be physically
located in India, similar to what's prescribed under the IT
(Intermediaries Guidelines) Rules, this issue is likely to come up
in future.
Under the new COPRA, the Central Government can introduce rules/
notifications to prevent unfair trade practices in
'e-commerce' space, i.e. retaining flexibility to
issue "bespoke" rules in future aimed at e-commerce
platforms/ aggregators (covering both goods and services) from a
consumer protection standpoint.
Though the new consumer law in India is a positive step and in
line with the needs of the "digital consumer", certain
aspects there open the Government to allegations of
over-legislating, especially in the tech/ e-commerce space, and
retaining "broad-brush" powers for issuing delegated
legislation (i.e. rules/ notifications) in future in the name of
"consumer protection" and it would be interesting to see
how the new law is applied in the digital and emerging-tech
space.
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The new legal regime on consumer protection overhauls the 1986 law to address issues arising from unique trade forms used in this era of digitization and e-commerce.
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