12 Aug 2019
INDIA: Consumer Protection Regime Revised and Extended
In a bid to streamline the redressal of consumer grievances and the settlement of any disputes, a number of revisions to the country’s consumer protection regulations have been approved. Billed as the Consumer Protection Act (2019), this new legislation supersedes all previous regulations.
Possibly the biggest change is the establishment of a Central Consumer Protection Authority (CCPA), which will be tasked with protecting the collective interests of consumers by addressing any complaints related to mass consumer rights violations, unfair trade practices or misleading advertising. The body will have its own investigative resource and the power to initiate enquiries, order the recall of faulty goods and impose penalties on any party found to be at fault.
While the CCPA will focus on mass consumer complaints relating to particular products, services or promotional campaigns, individual grievances will continue to be handled by the appropriate local consumer commission. For the first time, however, any such complaints may be submitted online while mediation of consumer disputes may also be conducted electronically.
In other changes, manufacturers and service providers will be liable to pay compensation should their products or services be found to have caused harm, while, in instances where a product is found to be defective, the whole of the relevant batch of the product in question will be subject to investigation. Under the previous practice, only the individual item deemed to be faulty would be examined.
In another significant revision, product manufacturers as well as anyone providing endorsements (including celebrities) will face fines of up to INR1 million (US$14,493) with regard to any false or misleading promotional activities. In addition, both the relevant product manufacturers and the producers of any promotional campaigns deemed to be misleading could face prison terms of up to two years. In the case of serial offenders, a fine of up to INR5 million (US$72,464) may be incurred, as well as a maximum prison term of five years.
The legislation also provides the framework for future regulations designed to boost transparency and enhance consumer protection in the e-commerce sector. Further details of these are expected to be forthcoming.