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Consumer Protection Act, 2019
Consumer Protection Act, 2019
The Parliament passed the Consumer Protection Act, 2019 replacing the three decades old Consumer Protection Act 1986. The 2019 Act tightened the rules that existed to safeguard the consumer rights. Introduction of strict penalties for misleading advertisements, a central regulator and guidelines for e-commerce and electronic service providers are some of the key highlights. The main purpose for the enactment of the Consumer Protection Act, 2019 is to provide timely and effective administration and settlement of consumer disputes and related matters.
Instead of bringing an amendment the Government enacted a new Act so as to provide enhanced protection to the consumers taking into consideration the booming e-commerce industry and the modern methods of providing goods and services such as online sales, tele-shopping, direct selling and multi-level marketing in addition to the traditional methods.
The Consumer Protection Act, 2019 widens the definition of consumer including e-commerce business. The 2019 act also widen the definition of Unfair Trade Practise which now includes advertisement that misleads the consumer, not issuing bill/memo for the goods or service, failing to take back defective goods or deactivate defective services and refund the amount within the stipulated time mentioned in the bill or memo or within 30 days in the absence of such stipulation; and disclosing personal information of a consumer unless such disclosure is in accordance with law.
The 2019 Act has also introduced the concept of 'unfair contract' which includes those contracts, which favour the manufacturers or service providers and are against the interest of the consumers. Unfair consumer contracts are now covered under the 2019 Act and a complaint in this regard can now be filed by a consumer. This would help to keep a check on businesses including banks and e-commerce sites that take advantage of their dominance in the market and mandatorily require the helpless consumers to sign such unfair contracts and accept their standard terms before selling them goods or providing services.
The Consumer Protection Act, 2019, established Central Consumer Protection Authority (CCPA) so as to regulate, protect and enforce the interest of the consumers and matters related to unfair trade practices. The CCPA has been provided with vast powers to inquire, investigate and take action against violations of the 2019 Act. Also it has the power to take action and impose penalty against misleading and false advertisement which includes an action against the celebrities who have endorsed misleading and false advertisement provided such celebrities failed to carry out any due diligence before participating in such advertisements. The CCPA may impose a penalty of up to Rs.10 Lakhs for first violation and up to Rs.50 Lakhs on every subsequent violation on a manufacturer or an endorser, for a false or misleading advertisement. In addition to this, such manufacturer or endorser may be sentenced to imprisonment for up to two years.
Another major introduction in the 2019 Act is the concept of Product Liability which covers the product manufacturer, product service provider and product seller, for any claim for compensation. The term 'product liability' is defined by the 2019 Act as the responsibility of a product manufacturer or product seller, of any product or service, related to the product to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating to the product. Therefore, the ground commonly taken by E-commerce websites that they merely act as 'platforms' will now not be valid before the court anymore. However, certain exceptions have been provided under the 2019 Act from liability claims, such as, that the product seller will not be liable where the product has been misused, altered or modified.
