“Consumer Protection Act 2019 (CPA) has changed the business scenario in India." Do you agree? Describe at least eight features of CPA giving suitable examples.

Impact of Consumer Protection Act 2019 on the Business Scenario in India

The CPA 2019 has undeniably transformed the business environment in India. It has instilled a greater sense of responsibility and accountability among manufacturers, service providers, and sellers. Businesses now operate under a more stringent regulatory framework, necessitating greater transparency, quality assurance, and ethical conduct. The Act has not only strengthened consumer rights but also provided more accessible and efficient redressal mechanisms, thereby creating a more balanced and consumer-centric marketplace. This has pushed businesses to reassess their practices, particularly in areas like advertising, product safety, grievance redressal, and e-commerce operations.

Key Features of the Consumer Protection Act 2019

The CPA 2019 introduced several innovative and powerful features that have had a profound impact:

1. Establishment of the Central Consumer Protection Authority (CCPA):

   The CCPA is a dedicated regulatory body with wide-ranging powers to promote, protect, and enforce consumer rights. Unlike the previous act, which primarily focused on consumer disputes, the CCPA can initiate investigations, conduct inquiries, order recalls of unsafe goods and services, and impose penalties for misleading advertisements and unfair trade practices. This proactive enforcement mechanism has significantly altered the compliance landscape for businesses.

   Example: The CCPA can suo motu investigate instances of widespread misleading advertisements, such as a company falsely claiming its product can cure a specific illness, and order the advertisement to be withdrawn and impose heavy penalties on both the manufacturer and endorsers.

2. Broadened Definition of 'Consumer':

   The CPA 2019 expanded the definition of 'consumer' to include transactions conducted through all modes, including offline, online, teleshopping, direct selling, and multi-level marketing. This crucial update brought the burgeoning e-commerce sector under the ambit of consumer protection, ensuring that online buyers receive the same protections as traditional shoppers.

   Example: A consumer purchasing a defective product from an e-commerce platform can now directly file a complaint under the CPA 2019, holding the platform and seller accountable, unlike the previous act where online transactions were often a legal grey area.

3. Product Liability:

   For the first time, the Act introduced the concept of product liability, holding manufacturers, product service providers, and product sellers responsible for any harm caused to a consumer due to a defective product or deficient service. This has increased the onus on businesses to ensure product safety and quality.

   Example: If a consumer suffers injury due to a manufacturing defect in a new appliance, they can now claim compensation from the manufacturer under product liability provisions, without necessarily proving negligence on the manufacturer's part.

4. Enhanced Pecuniary Jurisdiction of Consumer Commissions:

   The Act increased the monetary limits for filing complaints in District, State, and National Consumer Disputes Redressal Commissions, making the redressal process more efficient by distributing cases across the three tiers. This allows consumers to seek redress for higher value claims at lower forums.

   • District Commission: Up to INR 50 Lakhs (previously INR 20 Lakhs)
   • State Commission: Between INR 50 Lakhs and INR 2 Crores (previously INR 20 Lakhs to INR 1 Crore)
   • National Commission: Above INR 2 Crores (previously above INR 1 Crore)

   Example: A dispute involving a faulty car worth INR 40 Lakhs can now be filed directly with the District Commission, expediting the resolution process compared to the earlier regime where it would have gone to the State Commission.

5. Provisions for E-commerce and Direct Selling:

   The CPA 2019 specifically regulates e-commerce entities and direct selling, mandating specific duties for sellers and platforms. This includes disclosing seller details, establishing grievance redressal mechanisms, and ensuring fair trade practices in the digital space. This has brought much-needed accountability to online businesses.

   Example: E-commerce platforms are now required to display details of sellers, including their address and contact information, and establish a grievance redressal officer, allowing consumers to easily identify and contact the responsible party in case of issues.

6. Mediation as an Alternative Dispute Resolution (ADR):

   The Act introduced mediation as an ADR mechanism, allowing consumer commissions to refer complaints to mediation cells where there is a scope for settlement. This aims to reduce the burden on consumer courts and provide for quicker and more amicable resolution of disputes.

   Example: A consumer dispute over a minor service deficiency, such as a delayed delivery or a small billing error, can be referred to a mediation cell, where both parties can reach a mutually agreeable solution outside formal litigation.

7. Expanded Definition of Unfair Trade Practices:

   The CPA 2019 broadened the scope of 'unfair trade practices' to include several new practices, such as not issuing a bill or receipt, refusing to accept goods returned within 30 days, and disclosing personal information given in confidence. It also brought "unfair contracts" under its purview.

   Example: If a retail store refuses to provide a bill for a purchase, the consumer can file a complaint for an unfair trade practice under the new Act. Similarly, a contract with excessively one-sided terms could be challenged as an "unfair contract".

8. Penalties for Misleading Advertisements and Endorsers:

   The Act imposes stringent penalties on manufacturers, service providers, and endorsers for misleading advertisements. The CCPA can impose fines and even prohibit endorsers from endorsing any product or service for a certain period, thereby making celebrities and influencers more responsible for the claims they promote.

   Example: If a celebrity endorses a health product with false claims, the CCPA can impose a fine of up to INR 10 Lakh on the endorser and prohibit them from endorsing any product for up to one year for the first offense, encouraging due diligence.