Computer Crime Research Center


Shoppers’ law guide

Date: February 22, 2005
By: Rahul Ghosh , India

Legal rights for a sale in an e-commerce transaction are still a grey area. While consumers are not adequately protected in India, 13 countries have taken a step towards protecting online rights, writes Rahul Ghosh

Though e-commerce is aimed at the consumers, they are not adequately protected in India. The e-commerce consumers use a very different medium for purchase and other commercial activities - a medium where the touch and feel factors do not exist.

It means that most of the times the consumers have no clue about who they are interacting with on the site and where to go, should there be a delivery problem. The Information Technology Act 2000 is silent on the protection of online consumers’ rights. The Consumer Protection Act 1986 has not been amended by the Information Technology Act 2000 and as a result the law is providing a lot of challenge when applied to cyberspace.

Under section 2 (1) (e) of the Consumer Protection Act 1986, consumer dispute means a dispute where a person against whom a complaint has been made, denies or disputes allegations contained in the complaint. The Consumer Protection Act 1986 is all about consumer disputes relating to defective goods or service deficiency. The word “defect” has been defined in section 2 (1) (f) of the Consumer Protection Act and means that any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard, which is required to be maintained by or under any law for the time being in force. Or as is claimed by the trader, in any manner whatsoever in relation to any such goods.

The word “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performances, required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service. Obviously, the very definition of defect and deficiency requires standards and qualities, required to be maintained under any law in force for the time being. The law to be applied to a sale in an e-commerce transaction is still a grey area. By its very definition, by means of section 1 (2), the Consumer Protection Act 1986 extends to the whole of India except Jammu and Kashmir. Also, the Consumer Protection Act 1986 cannot be made applicable to cyberspace by means of specific sections under the Consumer Protection Act.

Section 11 of the Act states that a complaint shall be instituted in a district forum, in the local limits of whose jurisdiction the opposite party, at the time of the instant complaint, actually and voluntarily resides or carries on business or personally works for gain or where the cause of action wholly or partly arises.

This provision could create a lot of challenges and defects in its application in cyberspace. The Information Technology Act 2000 does not define Internet consumer fraud and provides for no punishment for such online fraudulent activities. As of now this is the situation in India.

A group of 13 countries viz Australia, Canada, Denmark, Finland, Hungary, Mexico, New Zealand, Norway, South Korea, Sweden, Switzerland, the UK and the USA have backed a project to tackle cross-border Internet fraud relating to consumer affairs and improve consumer confidence and e-commerce. As a part of it, a multilingual website at has been set up.

The site aims at providing detailed information on consumer protection for these 13 countries. In addition, a facility has been given to the citizens of these countries to file their online complaints. These countries will share confidential data about the complaints they receive from consumers so as to come down heavily on cross-border Internet fraud. Efforts are being made to create a single database in a parallel password-protected site, allowing governments to share data and other information on investigations into the e-commerce fraud.

Such an effort is likely to enhance the capacity of international law enforcement agencies to address complicated cross-border Internet fraud and deception issues. This is the first effort of its kind on a global basis. It is yet to be seen what concrete results will come out of these efforts. It is, however, a great step in the right direction for protecting online consumers.

(The author is a practising advocate)

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