Introduction-

• Recently, both houses passed the Consumer Protection Bill, 2019 that provides for the establishment of authorities for the timely and effective administration and settlement of consumer disputes. It will replace the three-decade-old Consumer Protection Act, 1986.
• It seeks to strengthen the consumer rights and provides a mechanism for redressal of complaints regarding defects in goods and deficiency in services.
• Several countries like Canada, Estonia have devised advertisement regulations for unhealthy foods targeted at children
• Countries such as the UK, Ireland and Belgium have specifically banned celebrity endorsement of unhealthy foods. The impact of such restrictions has been reported to be significant.

Important Features of The Consumer Protection Bill, 2019-

• Apart from setting up of authorities for timely and effective administration and settlement of consumer disputes, the bill also seeks to bring in e-commerce under their jurisdiction and hold celebrities accountable for false and misleading advertisements of products that they endorse.
• Apart from the consumer courts at the district, state and national level, the bill proposes a Central Consumer Protection Authority (CCPA) to promote, protect and enforce consumer rights as a class and protect them from unfair trade practices.
• CCPA, envisaged as a regulator, can file a class action suit if required and would take immediate action on any consumer complaint.

Rights of consumers: Six consumer rights have been defined in the Bill, including the right to-

1. be protected against marketing of goods and services which are hazardous to life and property;
2. be informed of the quality, quantity, potency, purity, standard and price of goods or services;
3. be assured of access to a variety of goods or services at competitive prices; and
4. Seek redressal against unfair or restrictive trade practices.

• The bill proposes strict action against the advertiser in case of misleading advertisements but not against the media through which the advertisement is being publicized.
• Celebrities can be fined up to 10 lakh. For repeat offences, this may rise to ?50 lakh, with a jail term of up to five years.
• Product liability: Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service.
• To claim compensation, a consumer has to prove any one of the conditions for defect or deficiency, as given in the Bill.
• It also provides for product liability action on account of harm caused to consumers due to defective products or deficient services.

Consumer Disputes Redressal Commission-

Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state, and national levels.

A consumer can file a complaint with CDRCs in relation to-

1. Unfair or restrictive trade practices;
2. Defective goods or services;
3. Overcharging or deceptive charging; and
4. The offering of goods or services for sale which may be hazardous to life and safety.

Complaints against an unfair contract can be filed with only the State and National Appeals from a District CDRC will be heard by the State CDRC.

Appeals from the State CDRC will be heard by the National CDRC.  Final appeal will lie before the Supreme Court.

Criticism-

• Misleading ads, tele-marketing, multi-level marketing, direct selling and e-commerce pose new challenges to consumer protection and will require appropriate and swift executive intervention to prevent consumer detriment.
• However, certain issues such as the appointment of mediators to settle disputes are contentious as this would lead to arm-twisting of the weaker parties and may encourage corruption.
• The Bill does not address the fundamental problem of protracted and complicated litigation, the bane of consumer forums constituted under the Consumer Protection Act of 1986. Instead, it provides an alternative to the consumer forums, in the form of mediation.
• The setting up of a Consumer Authority and absence of provisions to streamline the conducting of cases in courts may only lead to greater regulations and complexities.
• Addressing these issues is necessary to ensure that the new amendments bring about definitive improvements in the CPA.

Way forward-

• India is likely to cross China’s population by 2024 and consumerism is growing fast.
• With the passage of the Consumer Protection Bill in Parliament, consumer rights are set to receive a massive boost. The new regulations put more responsibility on companies for misleading advertising and faulty products.
• In a global first, it also lays out penalties for celebrities endorsing or promoting false advertising and adulterated goods.
• The emergence of global supply chain, rise in global trade and rapid development of e-commerce have led to a new delivery system for goods and services and also provided new options and opportunities for consumers.