E-commerce and Consumer Protection in India

E-commerce, one of the fastest emerging trends in shopping is an unconventional method, this is a very recent development in India and poses a lot of problems to consumers shopping online. CAG felt the need to actually focus on this issue to see if the websites were consumer friendly and also to see if there were adequate laws and redressal mechanisms in India to protect consumers shopping online. CAG, therefore undertook a study, ‘E-commerce and Consumer Protection in India’ in 2002, to look at e-trading websites and how consumer friendly they were. In 2006, CAG conducted a follow up study ‘Protecting consumer rights in e-commerce transactions’ to look at laws and redressal mechanisms available to consumers


Protecting consumer rights in e-commerce transactions in India
India in the recent years has been experiencing an exponential growth in e- commerce and there are new companies springing up at a rapid rate. About the only things accelerating faster than the use of the internet are the new risks that are associated with the medium's commercial applications. Although internet transaction have increased efficiency in transactions and increased accessibility for consumers, there exist many pitfalls that have not yet been satisfactorily dealt with. While growth in the e-commerce industry is sweeping across the country, there appears to be inadequate supervision (both governmental and non-governmental) and laws dealing with quality control for these new companies and this is what makes the rapid growth alarming. While there appears to be some discussion on a legal framework, there are virtually no watchdogs in the form of consumer NGOs or otherwise. As a result, it is unlikely that this new form of business will deal effectively with the issue of consumer welfare, which includes issues such as trust, privacy and sovereignty of consumers.

In light of the above negatives associated with e-commerce (specially with buying on the Internet) and taking into consideration the rapid growth of this industry, it is important that consumer groups in India take this problem seriously and come up with guidelines that can be used to make shopping on the Internet a safe experience. These guidelines can feed into the governmental process of making cyber laws to ensure that the issue of consumer welfare and sovereignty during internet shopping is addressed.

It is with this role in mind that CAG in 2001 began looking at the experience of shopping on the Internet using available interactive Indian websites that allow consumers to shop on the Internet and identified possible avenues of trade abuse by such e-commerce providers. The 2001 study brought to light a number issues such as privacy of information, provision of contract terms such as guarantees/warrantees, refunds, dispute settlement, hidden costs and misleading information and other problems because this sector has been free from any kind of regulation.

In 2006, CAG undertook a follow up study to look at consumer responses to online shopping and problems they have faced in shopping online. A detailed analysis of the laws prevailing in different countries showed that Indian laws are grossly inadequate to deal with problems in online shopping, issues such as phishing, spamming etc.