Dispute Resolution
Consumer Protection Act 2019 & E-commerce Rules Guide
Running an online business in India is no longer the Wild West. With the introduction of the Consumer Protection Act (CPA) 2019 and the specific E-commerce Rules 2020, Indian sellers face stringent compliance requirements.
The days of "No Refunds, No Returns" are over. Today, consumers are empowered with rights that can drag non-compliant businesses to consumer courts with ease. Here's what you need to know to stay safe.
Key Changes: CPA 1986 vs CPA 2019
The 2019 Act replaced the 3-decade-old 1986 Act to address modern challenges like e-commerce.
🆕 Major Updates
- E-commerce Included: Specifically defines and covers e-commerce entities.
- Product Liability: Sellers/Manufacturers are liable for harm caused by defective products.
- Unfair Trade Practices: Expanded to include misleading ads and refusal to take back defective goods.
- CCPA Established: Central Consumer Protection Authority effectively acts as a regulator.
Consumer Protection (E-Commerce) Rules, 2020
If you sell goods or services online (marketplace or inventory model), these rules apply to you. Here are the mandatory requirements:
1. Mandatory Disclosures
Every e-commerce entity must display:
- Legal name of the e-commerce entity.
- Principal geographic address of its headquarters and all branches.
- Name and details of the website.
- Contact details (email, fax, landline/mobile) for customer grievances.
2. Country of Origin
You must display the "Country of Origin" for all goods. This is crucial for compliance with Legal Metrology rules as well.
3. Grievance Redressal Mechanism
You must appoint a Grievance Officer and display:
- Name and contact details of the officer.
- Mechanism to file a complaint.
- Timeline: Acknowledge compliant within 48 hours and resolve within 1 month.
4. Refund & Cancellation Policy
A clear policy on return, refund, exchange, warranty and guarantee, delivery and shipment, and any other grievance redressal mechanism must be displayed.
⚠️ The "No Refund" Trap
You cannot have a blanket "No Refund" policy if the goods are defective or not as described. Refusing a legitimate refund for a defective product is an Unfair Trade Practice.
Product Liability: A Strict Warning
Under the 2019 Act, a "product manufacturer" or "product service provider" or "product seller" can be held liable if a product has a:
- Manufacturing defect.
- Design defect.
- Deviation from specifications.
- Lack of adequate instructions/warnings.
Impact: If a pressure cooker bursts due to a defect, the manufacturer/seller must compensate for the injury, not just replace the cooker.
Dark Patterns
The government is cracking down on "Dark Patterns"—deceptive design tricks used to mislead users. Avoid:
- False Urgency: "Only 2 left!" (when stock is full).
- Basket Sneaking: Adding insurance/donations to cart without consent.
- Subscription Traps: Making it easy to sign up but impossible to cancel.
Don't Sign Blindly.
Templates are just a start. Use AI to scan your specific contract for hidden risks and unfair clauses in 60 seconds.
Analyze Your Contract Free →Frequently Asked Questions
Who is a "Consumer" under the act?
Any person who buys goods or avails services for consideration. It excludes those who buy for "commercial purpose" (resale or commercial use), but includes those buying for self-employment.
Is mediation possible in consumer disputes?
Yes. The 2019 Act introduces statutory mediation. Courts can refer cases to mediation cells if there is a scope for settlement, saving time and money.
What is the penalty for misleading advertisements?
The CCPA can impose a penalty of up to ₹10 Lakhs on manufacturers/endorsers for a misleading ad. For subsequent offences, it can go up to ₹50 Lakhs.
Key Takeaways
- ✅ Appoint a Grievance Officer and display details.
- ✅ Eliminate "No Refund" policies for defective goods.
- ✅ Ensure product descriptions and images are accurate.
- ✅ Avoid Dark Patterns in your UI/UX.
Related reads: E-Contracts in India · Compliance Checklist