Now, goods or services which are sold through digital means like websites, marketplace, e-commerce platforms will be regulated by the Consumer Protection Act.
Organisations selling handicrafts/ handloom products online, online artisan collectives/marketplaces, educational or other learning platforms are all impacted by this new law. Let us look at some of the implications this new law on online sales by such organisations – both for profit and not-for profit.
1. Can Non-profits (Trust/Society/Co-operative Society/Sec 8 company/Liaison Office of Foreign Charity) be a consumer?
Yes - One important feature of the applicability of consumer protection law is that one has to be a `consumer’. It is essential that goods are being `sold’ for a consideration, in order to qualify as a consumer.
Therefore all non-profit entities that purchase goods or services for its own consumption or use are entitled to protection as consumers under the CPA.
2. Can Non-profits (Trust/Society/Co-operative Society/ Sec 8 company/Liaison Office of Foreign Charity) be an e-commerce entity?
If a non-profit online seller/e-commerce entity, provides goods or services free of cost, then the same shall not be covered under the consumer protection act.
A non- profit company selling goods of handicraft/handloom workers, online whether independently or on an e-commerce marketplace should comply with applicable provisions under the CPA.
To engage in providing e-commerce, the seller must be a company. This is to be noted by handicraft/handloom collectives selling online.
3. Are educational institutions like schools liable to comply with the CPA?
Yes. Courts have time and again held that pre-schools, schools, colleges and universities are amenable to the jurisdiction of consumer courts. However there are nuances or specific aspects of education that are not necessarily a service and therefore, it is best to consult a lawyer to understand applicability.
4. Are ed-tech companies providing online learning solutions an e-commerce entity?
Yes – any entity providing services online will have to comply. An EdTech platform which engages external faculties or a school which engages guest faculties to offer courses on their platform, should have written arrangement with the service providers to do the same.
5. What are the obligations of e-commerce entities under the CPA?
They are liable for the quality of the product/service
Must appoint a grievance officer & display mechanism for redressal of complaints
Personal information of customers collected should be protected against leakage
Misleading advertisements to be avoided
6. I am an individual providing personalised services/products through my website/ social media page. Am I an e-commerce entity under the Act?
That depends - activities carried out by a natural person in personal capacity not being part of any professional or commercial activity undertaken on a regular or systematic basis. Therefore, if the services or products are sporadic and not conducted in a systematic or organised manner, you are not covered by the rules. However if it is an organised trade in your name, then you will be bound to comply.
Do consult a lawyer for answers on compliances and obligations specific to your situation. Remember that non-compliance under the CPA attract monetary fines as well as imprisonment.