This Article is written by
Arpan Anand – 2nd Year of BBA LL.B.
Bharati Vidyapeeth,(Deemed to be University),New Law College Pune.
Abstract
Consumer protection has become a mainstay of legal systems world over which in turn has brought about fairness, transparency and accountability in markets. In 2019 India passed the Consumer Protection Act which saw out the 1986 Act and which introduced in its wake measures like e commerce regulation, product liability and the Central Consumer Protection Authority (CCPA). But when put to the test against the best international practices which includes that of the European Union’ directives, the OECD guidelines and the UN guidelines we see certain deficiencies in terms of enforcement efficiency, cross border redress and consumer awareness. This paper looks at India’s framework through a global lens which brings to light what we do and don’t have in place and also what areas require reform.
Keywords
Consumer Protection; India; Consumer Protection Act 2019; International Best Practices; UN Guidelines; EU Directive; OECD
Introduction
Consumer protection includes the set of laws, policies, and institutions which put in place safeguards for customers from unfair trade practices, defective products, fraud, exploitation, and infringement of what are base consumer rights. In our global setting in which trade doesn’t fall under individual national terms and which e-commerce has changed markets; protecting consumers is at once a matter of a single country’s health and the world’s.
India as a fast growing global consumer market for many years has also seen great changes in recent past which in turn have strengthened its consumer protection framework. In the 1986 we saw the introduction of the Consumer Protection Act which was a game changer at that time but with growth of digital platforms, cross border trade, and changing consumer needs the old act became a legacy. That is when we got the 2019 Consumer Protection Act which expanded the spectrum of what is a consumer right, brought in new regulatory bodies into play and also put in place measures like mediation and product liability.
Globally, it is a set that the United Nations Guidelines for Consumer Protection (UNGP) along with what is put forth by the European Union (EU), the Organisation for Economic Co-Operation and Development (OECD), and the United States (US) which we see as the primary players. What these do is to not only present remedies for when consumers have issues, but also put in place pro active regulations, consumer education, and also push for sustainable solutions.
This paper looks at in detail India’s Consumer Protection Act of 2019 and also we see how it measures up to international best practices. We put forth what are the strong points, what are the deficiencies and also which are the directions that the framework should take to align with global standards.
Consumer Protection in India: Evolution of present system.
1. At an early stage of development.
Consumer protection in India is a constitutional issue:.
Article 38 & 39: Principles that direct the State to bring about social justice and improve the welfare of the people.
Article 21: Right to life and personal freedom which includes health and safety in products.
Before 1986 consumer rights were covered in many different laws (Contract Act, Sale of Goods Act, Indian Penal Code, Drugs and Cosmetics Act etc.. In 1986 with the passage of the Consumer Protection Act we saw a consolidation of these rights and the introduction of consumer forums which made access to justice easier.
2. 2019 Consumer Protection Act.
In 2019 the which saw a modernization of consumer protection measures that address issues of the digital age.
Key Features:
· Wider definition of consumer: Includes online sales, direct sell to home, multi level marketing.
· Consumer rights expanded: Safety, info, choice, redressal, consumer education.
· Central Consumer Protection Authority (CCPA): Regulatory body to initiate actions against unfair practices.
· Product liability: Manufacturers, vendors, and service providers to blame.
· E-commerce regulation: Platforms to put out details, issue refunds, and report grievances.
· Grievance redressal: Three stage forums (District, State, National) plus mediation cells for rapid resolution.
· Penalties: Misleading ads which may draw fines up to 50 lakh and jail.
International Best Practices
1. United Nations Frameworks for Consumer Protection (UNFP, 1985, revised 2015).
Recognized Rights: Safety, option, info, remedy, education, healthy environment.
Emphasis on Sustainable Consumption: Promotes green production and consumer awareness.
Cross-border trade regulation: Guide states in global consumer protection.
2. OECD Principles (1999 update 2016).
Transparency in e-commerce.
Consumer empowerment through digital literacy.
Strong redressal for cross-border disputes.
Fair business, advertising, and marketing standards.
3. Union of Europe (UE).
Comprehensive Consumer Rights Directive (2011): Standardized consumer protection in all member states.
Right of withdrawal: Consumers have 14 days to cancel online purchases for any reason.
General Data Protection Regulation (GDPR): Strict rules for personal data use, consent, and penalties.
Speedy resolution of cross border disputes in the EU.
4. US.
Federal Trade Commission (FTC): Fights against unfair practices, fraud, false advertising.
Sectoral Regulation: FDA (food and drugs), CPSC (product safety), FCC (communications).
Class Action Suits: Consumas in mass take action for damages against companies.
Strong enforcement culture which is punitive.
Comparative Analysis
1. Regulatory Bodies.
India: CCPA which stands for the California Consumer Privacy Act regulates against unfair trade practices but works under the Ministry of Consumer Affairs which in turn limits its independence.
International: FTC in the US and EU Consumer Protection authorities which are separate entities that do outlays of multi billion dollar fines.
India’s regulator has a less robust structure which that of international agencies.
2. Ecommerce and digital rights.
India: In 2019 the act included e-commerce issues, seller disclosure, and refund policies.
EU: Long term rights including 14 day right to cancel for online purchases.
US: FTC goes after those which put out false info in the digital space.
India has the coverage but in terms of enforcement it is behind EU/US.
3. Product Issues.
India: In 2019 we see the introduction of which puts the responsibility on sellers/manufacturers.
US/EU: Long established, with strict liability and class action suits (which are non-existent in India).
India is behind in terms of collective redress.
4. Dispute Settlement.
India: Three stage commissions mediation but large case back log.
EU: ADR and ODR which is online dispute resolution see to faster cross border redress.
US: Class action lawsuits private mediation very common.
India still litigation-heavy.
5. Privacy and Sustainability.
India: Data protection regulations in flux (DPDP Act, 2023); which at the expense of sustainability.
EU: GDPR has very strict privacy rules; also the European Green Deal includes elements of consumer protection which are eco friendly.
India needs to work on improving digital and green consumer rights.
Case Studies
India
1. Horlicks v. Zydus (2020): CCPA went after health care fraud ads.
2. Amazon & Flipkart (2021): Challenged on issues of unfair trade practices.
Builder hit for delay in possession issue, report of real estate protection.
International
1. FTC v. Facebook (2019, US): A $5B fine for breaking data privacy (Cambridge Analytica).
2. Volkswagen Dieselgate (2015, EU): Billions in penalties for emissions fraud.
3. Apple iPhone Battery Case (2020): Apple hit with fines in EU and in the US for planned obsolescence.
References
1. Consumer Protection Act 2019 (India).
2. Consumer Protection Act 1986 (India) (repealed).
3. Horlicks Ltd v Zydus Wellness Products Ltd (2020) NCDRC.
4. Kavita Kandhari v Mantra Properties Pvt Ltd (2022) NCDRC.
5. Federal Trade Commission v Facebook Inc (2019) FTC Docket No C-4365 (US).
6. In re Volkswagen ‘Clean Diesel’ Marketing, Sales Practices, and Products Liability Litigation (2015) MDL No 2672 (US District Court, Northern District of California).
7.Apple Inc iPhone Performance Settlement (2020) US District Court for the Northern District of California.
8. United Nations, United Nations Guidelines for Consumer Protection (as revised in 2015).
9. Organisation for Economic Co-operation and Development, OECD Guidelines for Consumer Protection in the Context of E-commerce (2016).
10. European Union, Directive 2011/83/EU of the European Parliament and of the Council on Consumer Rights [2011] OJ L304/64.
