Govt To Overhaul Consumer Protection Act To Bring e-tailers Under Its Ambit

The government is planning to overhaul the Consumer Protection Act in the upcoming winter session of Parliament to enable consumers to take 'territory free' legal action against any goods or service provider. At present, a consumer can take legal action against a seller only at the place of transaction.

The Ministry of Consumer Affairs is working on protecting the interest of customers as shopping is no more constrained by geographical location. "Technology has erased geographic boundaries... For effective consumer protection it is essential that new law addresses these challenges," a ministry official said.

The new law would cover both vendors in online space and also marketplace providers like Amazon and Flipkart. The government aims to empower consumers to take legal action against e-tailers.

"This is a welcome order for consumers, as they can file for damages or a compensatory suit in their local jurisdiction saving time and money," says Sanjay Ashar, senior partner of Crawford Bailey & Co.

"However it will be difficult for ecommerce companies to fight at several courts. When a company has many cases related to similar products or services, it can go to High Court and transfer those cases to one place. Also, if two courts in different places pass contradicting orders, it will be difficult for the company to know which one to follow, until they get clarity from higher courts. This will certainly increase the legal cost of the e-commerce industry," he added.
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