Consumer Protection

in E-commerce

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INTRODUCTION
With the emergence of new modes of business The definition of consumer has also been
like telemarketing, online shopping, etc. the effect widened in the new Act and now it also covers
of Consumer Protection Act, 1986 had blurred e-consumers under its ambit.
leading to a significant rise in unfair trade
practices. Further, Section 2(16) CPA, 2019 defines e-
commerce as buying or selling of goods or
Therefore, new provisions have been introduced services including digital products over digital
by the Consumer Protection Act, 2019 (CPA) and or electronic networks.
the Consumer Protection (E-commerce) Rules,
2020 to regulate e-commerce and keep a check
on rising instances of unfair trade practices.

SCOPE OF E-COMMERCE 1.
2.
Rule 2 of Consumer Protection (E-commerce) 3.
Rules, 2020 provides that the provisions relating 4. all forms of unfair trade practices across all
to e-commerce shall be applicable to the models of e-commerce.
following transactions subject to any notification
by the Central Government. Provided that these rules shall not apply to any
activity of a natural person carried out in a
1. all goods and services bought or sold over personal capacity not being part of any
digital or electronic network including digital professional or commercial activity undertaken
products; on a regular or systematic basis.
2. all models of e-commerce, including
marketplace and inventory models of e- The proviso extends protection to those sellers
commerce; who are neither regular business persons nor
3. all e-commerce retail, including multi-channel professionals but are involved in selling goods
single brand retailers and single brand retailers and services over online platforms occasionally.
in single or multiple formats; and

MODELS OF
E-COMMERCE

Myntra

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DUTIES AND LIABILITIES OF E-COMMERCE

ENTITIES AND SELLERS

Duties of E-commerce Entities

Rule 4 of Consumer Protection (E-commerce) Rules, 2020 provide for duties of e-commerce
entities. E-commerce entity means any person who owns, operates or manages a digital or
electronic facility or platform for electronic commerce, but does not include a seller offering his
goods or services for sale on a marketplace e-commerce entity.

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Lawctopus Law School | Consumer Law & Practice

Liabilities of Marketplace
E-commerce Entities & Sellers

As mentioned above, market place entities are

those online shopping models which provide
platforms to different sellers on their websites
for selling their goods and services. Consumer
Protection (E-commerce) Rules, 2020 provides Rule 6 of Consumer Protection (E-commerce)
for separate liabilities of the marketplace Rules, 2020 provides for the following duties of
entities and the sellers who use the platform the sellers using market place entities for
provided by the market place entities. selling their goods and services-No seller
should adopt any unfair trade practice and
Let us look into these liabilities one by one. post fake reviews about his/her own goods.

Rule 5 of Consumer Protection (E-commerce) 1. Every seller should provide a fair refund and
Rules, 2020 provides for the following liabilities cancellation mechanism for purchased
of marketplace e-commerce entities: goods and services.
2. Every seller offering goods or services
1. Every marketplace e-commerce entity shall through a marketplace e-commerce entity
require sellers through an undertaking to shall:
ensure that descriptions, images, and other a. have a prior written contract with the
content pertaining to goods or services on respective e-commerce entity in order to
their platform is accurate and corresponds undertake or solicit such sale or offer;
directly with the appearance, nature, b. appoint a grievance officer for consumer
quality, purpose and other general features grievance redressal and ensure that the
of such good or service. grievance officer acknowledges the
2. Every marketplace e-commerce entity shall receipt of any consumer complaint
provide the information related to the within forty-eight hours and redresses
sellers, quality of goods and services, the complaint within one month from
warranty, guarantee etc. in a clear and the date of receipt of the complaint;
accessible manner, displayed prominently c. ensure that the advertisements for
to its users at the appropriate place on its marketing of goods or services are
platform. consistent with the actual
characteristics, access and usage
conditions of such goods or services.
d. provide to the e-commerce entity its
legal name, principal geographic address
of its headquarters and all branches, the
name and details of its website, its e-
mail address, customer care contact
details such as fax, landline, and mobile
numbers and where applicable, its GSTIN
and PAN details.
3. Every seller offering goods or services
through a marketplace e-commerce entity
shall provide requisite information related to
the goods and services to the e-commerce
entity to be displayed on its platform or
website

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Liabilities of Inventory 1.
2. Inventory e-commerce entities should not
E-commerce Entities make false representation and should not
contain fake reviews of goods and services
on their websites.
Inventory e-commerce entity means an e- 3. Inventory e-commerce entities should
commerce entity which owns the inventory of ensure that advertisements for the
goods or services and sells such goods or marketing of goods or services should be
services directly to the consumers and shall consistent with the actual characteristics,
include single brand retailers and multi- access and usage conditions of such goods
channel single brand retailers. or services.
4. Inventory e-commerce entities should have
Rule 7 of Consumer Protection (E-commerce) fair refund, cancellation and grievance
Rules, 2020 provides for the following duties redressal mechanism.
and liabilities of inventory e-commerce entities: 5. Any inventory e-commerce entity which
explicitly or implicitly vouches for the
1. Inventory e-commerce entities should authenticity of the goods or services sold by
provide clear and accessible information it, or guarantees that such goods or services
related to goods and services available for are authentic, shall bear appropriate
purchase. liability in any action related to the
authenticity of such good or service.

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