Introduction : The Consumer Protection Bill, 2018 seeks to replace the three-decade-old Consumer Protection Act, 1986, which was amended thrice but is still found wanting in tackling the challenges posed by online transactions, and tele-marketing, multi-level and digital marketing. The present Bill aims to match the consumer rights law with the changing market of goods and services.
Provisions: The Bill seeks to provide,
1. Consumer rights – are defined as :
- protection against the marketing of goods, products or services which are hazardous to life and property.
- informed about the quality, quantity, potency, purity, standard and price of goods, products or services; and to be assured of access to a variety of goods, products or services at competitive prices.
- heard and to be assured that the consumer interests will receive due consideration at appropriate forum;
- to seek redressal against unfair or restrictive trade practices or unscrupulous exploitation of consumers; and the right to consumer awareness.
2. New regulatory authority, the Central Consumer Protection Authority (CCPA) – It aims to promote, protect and enforce the rights of the consumers. CCPA has the authority to
- direct the removal of a misleading advertisement, take punitive action such as imprisonment or imposing penalties on the advertiser and seller, and even barring a person from endorsing the product or service for up to a year.
- The Bill also lists punitive actions against those who are found manufacturing, storing, distributing, selling, or importing products that are spurious or contain adulterants.
3. Product liability rules : This is the first time that powers to take action for damage caused by a product have been introduced in a consumer protection framework.
- For example, a consumer can sue the cab aggregator if the taxi comes late and as a result, they miss a scheduled flight.
- Also, the case can be filed from anywhere, unlike the existing law which allows the consumer to register the complaint only from the same place of purchase of the product or where the service is availed.
- Typically, the onus to prove a defect is on the complainant. This is bound to make manufacturers, sellers and service providers jittery and more vulnerable than before thereby compelling them to be extra vigilant in conducting internal quality control checks and manufacturing audit.
4. Grievance Redressal – The Bill seeks to set up a monitoring cell, to be constituted by the president of the National Consumer Disputes Redressal Commission (NCDRC) to oversee the functioning of the State consumer commissions from the administrative point of view. The Bill provides for a State government to establish a consumer mediation cell to be attached to each of the district commissions and the State commissions. Further, the Bill proposes that the Centre establishes a consumer mediation cell to be attached to the National Commission. The mediation cell will try to resolve petty and minor grievances.
5. Strict rules for misleading and celebrity endorsements :
- The Bill now provides a definition for mis-guiding advertisement and states that a misleading advertisement includes an advertisement which falsely describes, gives false guarantees or convey representations, resulting into unfair trade practice and deliberately concealment of important information.
- The Bill does not define an “endorser” but it states that an endorser shall also be equally liable with a product manufacturer. However, an endorser would be exempt from such penalty if he can prove, that he or she exercised reasonable care and due-diligence to authenticate claims made in such advertisement.
Criticism : The present bill is holistic and in adherence with contemporary time but the shortfalls still remains, which are as follows :
1. ”Due diligence” as escapist gateway – No endorser will be liable to a penalty if he/she has exercised due diligence to verify the claims. Such a provision can create a regulatory loophole and keep celebrities out of the purview of prescribed penalties. Celebrities or the endorsers may also not be able to understand the scientific composition of foods or the science behind the claims.
|Case Study : Celebrity Endorsed Food Products
Advertisements of food products endorsed by celebrities can have long term effect on public health. Popular food and beverages high in salt, sugar or fat, which have been endorsed by celebrities.Some of these have often been positioned as healthy food alternatives. People tend to see only the positives highlighted in any advertisement and not the potential negative impacts. Maggi Atta Noodles, for example, was advertised as a whole grain food with real vegetables. Nowhere was it mentioned that instant noodles have high salt and fat content. The increased cases of NCDs ( Non Communicable Diseases ) should make the case strong.
2. Historical Track-record of Grievance Redressal – The past experiences of consumer dispute redressal has been marred with delays and official laxity. The piled up pending cases and delayed justice kept the consumer away. The Consumer Protection Act, 1986, mandated all cases to be settled in 90-150 days. According to the National Consumer Disputes Redressal Commission only 46% of cases in the district courts were settled in the mandated time and 38% in the state courts. And, according to the ministry of consumer affairs, food & public distribution, there are 350,000 cases pending. On an average a consumer is being made to suffer for an average of five years to get their grievances redressed.
3. Mediation Cell – It faces huge logistical walls for implementation. The whole new chapter has been devoted to mediation, appointment of mediators and the system of mediation to settle disputes.Although the concept of mediation is novel, Indian experience in mediation has witnessed repeated failures.
4. Keeping Advocates at Bay – Another contentious amendment proposed is for the barring of advocates from appearance in the Forums, both in complaints and appeals, if the matters pertaining to amounts under dispute are lesser than Rs 2 lakh. Such a move is not in consonance with existing grievance redressals. While consumers would welcome this move in favour of quick settlement of their disputes, expect a furore from the legal profession which will see sinister designs to prevent from earning their livelihood in this amendment.
5. Product Liability in the era of sophisticated technology – The most basic challenge could be the inability of the consumer to prove defects in such products.
Conclusion : In summation, by introducing specific provisions governing pressing issues like misleading advertisements, creation of a regulator, mediation and product liability for the first time, the Bill does fare well. It aspires to substantially reduce the time taken for adjudication of disputes by Consumer Forums. However, clarity on certain issues like a definition of endorsers, design defects under product liability and overlapping jurisdiction of CCPA and Consumer Forums for grievances affecting a class of consumers are some areas, which need to be revisited. While the Bill is definitely a step in the right direction and shall strengthen consumer rights and sentiment in the foreseeable future.
E-commerce in India has grown leaps and bounds, and is set to record unprecedented growth owing to increasing penetration of internet. As per India Brand Equity Foundation, India’s e-commerce industry is expected to surpass the US as the second-largest in the world by 2034. The Bill empowers the Centre to formulate measures to prevent unfair trade practices in e-commerce by :
(1) mandated to share with consumers the main features of their terms and conditions in a simplified and an easily understandable form; and
(2) required to disclose to consumers the terms and conditions governing their arrangement with vendors.
Criticism : However the shortfall still exists in the bill as follows :