Several provisions of India’s new Consumer Protection Act, 2019 came into force on July 20, 2020. The remaining provisions came into effect on July 24, 2020.
These mainly deal with:
- liability of endorsers;
- unfair trade practices in e-commerce; and
- establishment of the Central Consumer Protection Authority.
Penalties for false or misleading advertisements will now be levied against the endorsers of products. Moreover, endorsers will be banned from endorsing any products or services for a period extending up to one (1) year for the first and up to three (3) years for every subsequent contravention.
The Consumer Protection (E-Commerce) Rules, 2020 have also been notified, which stipulate the obligations of e-commerce entities (both marketplace and inventory based entities) and sellers on e-commerce marketplaces. This includes provisions on:
- setting up a grievance redressal mechanism;
- disclosure of information regarding the goods and services being sold; an
- prohibition of unfair trade practices (such as falsely representing itself as a consumer and posting reviews).
As e-commerce has become an even bigger business in the Covid era, let us hope that e-commerce companies adhere to the new rules and act in a consumer-friendly manner.