NEW CONSUMER PROTECTION LAW IN INDIA

The key highlights of the Act are as under:

-“Product Liability” provision has been included to prevent delivering defective products or deficient services;

– E-commerce and Direct Selling or Multi-level Marketing has been brought within the ambit of this act;

– Increase in the pecuniary jurisdiction of the Consumer Redressal Forums;

– Simplified dispute resolution process;

– Establishment of Central Consumer Protection Authority (CCPA) and its benches;

– Imposes higher penalties to deter misleading advertisements and adulteration of products;

– Introduction of new additional grounds to file complaints.

“On 09 August 2019 The Government of India notified the Consumer Protection Act2019 (CPA, 2019), as Act 35 of2019 repealing the Consumer Protection Act,1986 (CPA, 1986). The Act had to be enacted to regulate changing new age economy and trading platforms viz E commerce and Direct Selling or Multilevel Marketing. It aims to provide robust grievance redressal mechanism to protect and enforce consumer rights”.

It has far-reaching effects on Direct Selling or Multi-level Marketing which were Hitherto regulated by self-declaration of compliance to Direct selling Guidelines, 2016 only.

Let us take a look on the salient features of CPA, 2019 vis-à-vis Direct Selling or Multi-level Marketing Platforms:

Vide Sec 2(7) of CPA, 2019 the definition of “Consumer” has been broadened to include a person who makes purchases in offline or online transaction through electronic means, tele shopping. Direct Selling or Multi-level Marketing (This Definition will affect the Direct Selling or Multi-level Marketing platforms in as much as that not only the manufacturer of direct selling entity but even a seller at each level of marketing can be exposed to liability)

– Vide Sec 2 (6) of CPA 2019,”Unfair unilateral and unreasonable has been replaced by “Unfair contract” or Including an ‘Online Contract’ which causes significant changes in the Rights of a consumer”.

In addition Direct Selling or Multi-Level Marketing entities, their distributors and team members can still be held liable under “Product Liability” to pay compensation to a consumer U/S 2(34) and U/S 2(35) for Deficiency of services. A Product Liability Action cannot however be brought against, if it falls under the exceptions given in Section 87 of the CPA, 2019. Here the word “Product Seller” means a Direct Selling Entity any harm suffered by him due to a defective product: manufacture Section 84, 85 & 86 of CPA, 2019provide for a Product Liability. Action whereby a product manufacturer shall be liable to, if a product contains a manufacturing defect or due to defective design or deviation from specifications or does not conform to the