The interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer – Adam Smith

INTRODUCTION

The term consumerism was first used in the 1960’s by a businessman, which if looked at from economics perspective has a different meaning altogether, it means the satisfaction attained by a consumer after increased consumption of goods. However, when used in the light of consumer protection, it implies a force that is built to protect the rights of the consumers, it could be in the form of a consumer movement or it could be making the consumers aware of their rights. Now, some others say that it means the different sets of activities undertaken by the government, businesses, and organizations to protect the interests of the consumers.[1]

In recent times, there has been a steep rise in e-commerce activities, wherein the consumers have shown a preference towards online shopping, be it through a national platform (PharmEasy) or an international platform (Amazon), over the traditional brick and mortar stores. Who would not prefer the comfort of shopping from the cozy corners of their house? However, the national law governing consumer protection is not sufficient to cover all the aspects of such internationalization of consumer habits and to cater to the same an international framework is needed.

Due to globalization, the possibility of misleading the consumers has also sharply increased. For instance, the Facebook – Cambridge Analytica case, wherein the data of thousands of users was compromised. The principle of Caveat Emptor plays a very important role while understanding consumer protection laws. However, how is this principle to be applied in case of an online transaction, wherein, the buyer cannot possibly check the quality of the product he/she is purchasing or see if the product is original or not. Moreover, the need for having an international framework and co-operation by governments has also been emphasized by the UN Secretary General in 1980 as the measures at the national level are not sufficient for consumer protection in recent times.[2]

DOMESTIC FRAMEWORK

·      Constitutional provisions

Though not directly, the Indian Constitution under article 19(1)(g) provides for freedom of trade and business. However, this freedom is not absolute and can be restrained under Article 19(6), if the same is necessary for the interests of the general public. For instance, the Ministry of Health and Family Welfare (Department of Health) issued a notification dated 30^th April, 1992 prohibiting the use of tobacco in toothpastes or tooth powders. The Hon’ble Supreme Court in the case of Laxmikant v. Union of India[3] upheld the notification on the ground that the use of tobacco has major health effects and hence, it is necessary for protecting the interests of the public and was well within Article 19(6).

Thus, the freedom of trade and business can be curbed in the interests of the general public and the same is relevant while preparing regulations for the operation of a business or carrying out trade and through this, the government can lay down any criteria or provisions for consumer protection, till the extent of the criteria or the provision falling within the ambit of Article 19(6). For instance, the need for licenses and permits for carrying out certain businesses, it can be said that the same has been provided for in order to protect the interests of the consumers. However, the restrictions have to be reasonable.

Furthermore, Article 21 of the Indian Constitution which is the most important fundamental right, guarantees the right to life, free from all forms of exploitation. The directive principles also ensure a constitutional mandate for protecting the rights of the consumers.[4]

Article 47 of the Indian Constitution provides that the State should take measures to raise the level of nutrition and improve the standard of living and it shall make efforts to prohibit the use of drugs and intoxicating drinks that has a harmful effect on the health of the people.

·      Other Legislations

The Consumer Protection Act, 1986 (“CPA, 1986”) protected the interests of the consumers in India, which will now be replaced by the Consumer Protection Act, 2019 (“CPA, 2019”). CPA, 2019 was passed by the Parliament on 6^th August, 2019 and received the President’s assent on 9^th August, 2019, after which it was published in the Official Gazette. The CPA, 2019 has been notified by the Central Government w.e.f. from 20^th July, 2020, however, the definition of e-commerce is yet to be notified.[5]

CPA, 2019 defines e-commerce to mean the buying and selling of goods through an online platform. However, it is not sure if this definition also includes transactions taken place offshore.[6] On the other hand, the Consumer Protection (E-Commerce)Rules, 2020 (“Rules”) (yet to be notified) states that these rules shall also be applicable to an e-commerce entity which is not established in India but offers goods or services to consumers in India. Thus, this disparity between the CPA, 2019 and the Rules needs to be resolved.

There are several issues pertaining to cross-border transactions that need to be answered and the same has a significant impact on consumer rights. For instance, in case of an online fraud, who would have the jurisdiction to hear the matter, how to resolve the payment fraud, the remedies available in case of delivery of substantial products, and so on.

There is no direct remedy available to a consumer indulging in a cross-border transaction. One may argue that the consumer could take recourse of Information Technology Act, 2000 (“ITA”), however, the same does not specifically deal with the rights of consumers as it mainly covers aspects regarding digital signature, document authentication that is in electronic form or recognition of electronic records and so on, which are relevant when we talk about a commercial or a business transaction.[7]

The number of complaints received by the National Consumer Helpline regarding e-fraud is shocking. There has been a whooping rise of 475% within a span of 3 years. The number of complaints received in the Financial Year (“FY”)  August 2016- March 17, beginning from August, were 977 and in the FY April 2019 – November, 2019 there were 5620 complaints. Thus, one can see the importance of e-commerce and the number of frauds taking place with no concrete dispute redressal mechanism in place.[8] The ITA, under Section 1(2), provides that the act is also applicable to contravention committed outside India. However, there is nothing that has been specifically provided for cases of online frauds, whether committed in India or outside India.

INTERNATIONAL FRAMEWORK

Consumer protection has attained a new international dimension due to the development of technology and an increase in cross-border trade and hence there is an urgent need to put in place inter-governmental co-operation to ensure smooth resolution of disputes. For instance, Amazon delivers its products to several jurisdictions (fun fact, Amazon sells an average of $17 million per hour[9]), including India and with such internalization of e-commerce, it is pertinent to have a strong international framework in order to protect the rights of the consumers. International consumer law is a relatively new area in the legal discipline and the two main purposes that it intends to achieve are (1) uniformity in minimum standards for consumer protection and (2) eradication of cross-border trade barriers.[10]

·      UN Guidelines for Consumer Protection

The first step towards the internalization of consumer protection law was taken in the year 1885 by the introduction of the UN Guidelines for Consumer Protection (“Guidelines”) and this year marks completion of 35 years of these Guidelines. In order to keep up with the changing trends, these Guidelines were revised in the years 1999 and 2015. The 2015 revision makes provision for new aspects, inter alia, good business practices, e-commerce, and dispute resolution.

The main drawback of these Guidelines, just like any other international instrument, is that they are soft law and hence, are not binding on the Member States. The same can be noted in the objective of these Guidelines which states that it aims at assisting the Member States in the formulation of national law and policy regarding consumer protection. Further, throughout the Guidelines it has been mentioned that the “Members should” undertake the mentioned steps, thus, implying that it is not mandatory for the Member States to inculcate the provisions of these Guidelines in their domestic law.

However, one cannot simply neglect the positive impact of these Guidelines, despite their non-binding nature. For instance, Uruguay reviewed its consumer legislation keeping the Guidelines as their referring point, National Consumer Protection Board was established in Ecuador and these Guidelines have also been used by various consumer protection bodies to bring about a change in their legislations.[11]

·      Other Measures

Apart from the Guidelines, various other organizations have played an important role in consumer protection at an international level. These include United Nations Conference for Trade and Development (“UNCTAD”), World Intellectual Property Organization (“WIPO”), World Health Organization (“WHO”), Food and Agricultural Organization (“FAO”), International Labour Organization (“ILO”) and so on.[12]

It is pertinent to note the contribution of the Organization for Economic Co-operation and Development (“OECD”), which has established a Committee on Consumer Policy that addresses a broad range of consumer issues by conducting research and making policy development reports. For instance, in the year 2016, the Committee submitted a detailed report on “Consumer Protection in E-Commerce”. UNCTAD has also played an active role in the international regime and assists various developing countries. It recently came up with a Manual on Consumer Protection, in order to provide a detailed guide on the subject.

International Consumer Protection and Enforcement Network (“ICPEN”), as the name suggests, is a global network comprising of more than 60 countries. The ICPEN has launched a website, i.e. www.econsumer.gov, wherein the consumers can submit their complaints in case of cross border disputes.

CONCLUSION

Despite the efforts of the various international organizations to internationalize the consumer protection law, the drawback of the same being non-binding still exists and hence, is a major issue in implementing the same. Ensuring the efficacy of consumer protection law is significantly important as at the end of the day everyone is a consumer and thus our rights as a consumer are affected. The issue regarding solving cross-border disputes is majorly affected due to various factors involved such as jurisdiction and the applicable law. Even though our national legislation does not talk about cross-border disputes, looking at the recent developments, the same should be incorporated soon.