Noose tightens around Flipkart, Amazon as e-commerce frauds now under govt scanner

By: |
July 31, 2019 2:18 PM

With the Lok Sabha passing the Consumer Protection Bill on Tuesday, e-commerce frauds and unethical trade practices could soon be under the purview of the central government.

Delhi HC Bars E-Commerce Firms From Selling Direct Sellers' Products Without ConsentThe Consumer Protection Bill factors in rapid development seen in e-commerce front and the subsequent rise in unfair trade and unethical business practices.

Online shoppers may soon have something to cheer: greater protection from e-commerce frauds, as the government addresses the issues consumers face in a fast-changing new-age economy. With the Lok Sabha passing the Consumer Protection Bill on Tuesday, e-commerce frauds and unethical trade practices could soon be under the purview of the central government. With this Union Minister Ram Vilas Paswan’s pending project of getting Consumer Protection Bill enacted is now a step closer. The bill addresses consumer problems that have undergone a vast change with a rapidly evolving economy and business models since 1986, the last time when the bill was enacted.

The Consumer Protection Bill factors in rapid development seen in e-commerce front and the subsequent rise in unfair trade and unethical business practices. The Consumer Protection Bill 2019 has hence proposed to repeal and reenact Act 3. Also, the Central government has been empowered to take measures to prevent unfair trade practices in e-commerce, direct selling and also to protect the interest and rights of consumers, according to the bill.

Presenting the objective and reason of amendments, Minister of Consumer Affairs Ram Vilas Paswan said that the consumer market for goods and services has undergone drastic transformation since the time when the Consumer Protection Act was enacted in 1986. “The emergence of global supply chains, rise in international trade and the rapid development of e-commerce has led to new delivery systems for goods and services and have provided new options and opportunities for consumers,” the bill said.

However, the same has also increased consumer vulnerability to new manifestations of unfair trade and unethical business practices. “Misleading advertisements, telemarketing, multi-level marketing, direct selling and e-commerce pose new challenges to consumer protection and will require appropriate and swift executive interventions to prevent consumer detriment”.

Highlights of the 2019 bill

  • The bill has proposed Central Consumer Protection Authority for promoting, protecting and enforcing consumer rights as a class and protect them from unfair trade practices.
  • It also has provisions to deal with misleading advertisements and holding celebrities accountable for false endorsements. The bill has proposed penalty up to Rs 10 lakh by the CCPA for false and misleading advertisements, under Clause 21 which can be levied from the celebrities.
  • Under product liability provision, the consumer can now get compensation for harm caused by defective products.
  • Violation of consumer rights has been made punishable.

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