Lok Sabha Question No. 365 (STARRED), answered on 2025-03-26
Subject: Misleading Business Practices by e-Commerce Companies
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: Shri Charanjit Singh Channi

## Government of India

## Ministry of Consumer Affairs, Food and Public Distribution Department of Consumer Affairs

## LOK  SABHA

## STARRED QUESTION NO. *365

TO BE ANSWERED ON 26.03.2025

## MISLEADING BUSINESS PRACTICES BY E-COMMERCE COMPANIES

*365.  SHRI CHARANJIT SINGH CHANNI:

Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION be pleased to state:

- (a) whether the Government is aware of fraud and misleading business practices by online e-commerce companies in Punjab and if so, the number of consumer complaints received during the past three years;
- (b) whether the Government has established any special monitoring mechanism to prevent irregularities on online shopping platforms and if so, the manner in which it is being implemented;
- (c) whether the Government is conducting any awareness campaigns in Punjab to educate consumers about their rights  and  grievance  redressal  mechanisms  while  purchasing  from  e-commerce companies and if so, the details thereof; and
- (d) whether the Government has issued strict guidelines under the Consumer Protection Act, 2019 for online marketplace companies and if so, the measures being taken to ensure their compliance?

## ANSWER

## THE MINISTER OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (SHRI PRALHAD JOSHI)

- (a) to (d)  :   A Statement is laid on the Table of the House.

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## STATEMENT  REFERRED  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  LOK  SABHA STARRED  QUESTION  NO.*365 FOR 26.03.2025 REGARDING  MISLEADING BUSINESS PRACTICES BY E-COMMERCE COMPANIES.

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Department of Consumer Affairs is continuously working for consumer protection and empowerment  of  consumers  by  enactment  of  progressive  legislations.  With  a  view  to  modernize  the framework governing the consumer protection in the new era of globalization, technologies, e-commerce markets etc. Consumer Protection Act, 1986 was repealed and Consumer Protection Act, 2019 was enacted.

Salient features of the new Consumer Protection Act, 2019 are establishment of a Central Consumer Protection Authority(CCPA); simplification of the adjudication process in the Consumer Commissions such as  enhancing  pecuniary  jurisdiction  of  the  Consumer  Commissions,  online  filing  of  complaint  from  the Consumer Commission having jurisdiction over the place of work/residence of the consumer irrespective of the place of transaction, videoconferencing for hearing, deemed admissibility of complaints if admissibility is not decided within 21 days of filing; provision of product liability; penal provisions for manufacture/sale of adulterated products/spurious goods; provision for making rules for prevention of unfair trade practice in e-commerce and direct selling.

The Consumer Protection Act, 2019 provides for a three tier quasi-judicial  machinery  at  District, State  and  Central  levels  commonly  known  as  'Consumer  Commissions'  for  protection  of  the  rights  of consumers and to provide simple and speedy redressal of consumer disputes including those related with unfair trade practices. The Consumer Commissions are empowered to give relief of a specific nature and award compensation to consumers, wherever appropriate.

The National Consumer Helpline (NCH) administered by the Department of Consumer Affairs has emerged as a single point of access to consumers across the country for their grievance redressal at a prelitigation stage. Consumers can register their grievances from all over the country in 17 languages including Hindi, English, Kashmiri, Punjabi, Nepali, Gujarati, Marathi, Kannada, Telugu, Tamil, Malayalam, Maithili, Santhali, Bengali, Odia, Assamese and Manipuri through a toll-free number 1915. These grievances can be registered on Integrated Grievance Redressal Mechanism (INGRAM), an omni-channel IT enabled central portal,  through  various  channels-  WhatsApp  (8800001915),  SMS  (8800001915),  email  (nch-ca@gov.in), the NCH app, the web portal (consumerhelpline.gov.in) and the Umang app, as per their convenience.  1049 companies, who have voluntarily partnered with NCH, as part of the 'Convergence' programme directly respond to these grievances according to their redressal process and revert by providing a feedback to the complainant  on  the  portal.  Complaints  against  those  companies,  who  have  not  partnered  with  National Consumer  Helpline,  are  forwarded  to  the  company  for  redressal.  The  total  number  of  the  grievances pertaining  to  e-commerce  registered  in  National  Consumer  Helpline  during  last  three  years  in  respect  of State of Punjab are as under:-

|   Year |   Total Grievances pertaining to E Commerce registered from Punjab |
|--------|--------------------------------------------------------------------|
|   2024 |                                                               7986 |
|   2023 |                                                               8448 |
|   2022 |                                                               7404 |

Section 2(28) of the Consumer Protection Act, 2019 defines 'misleading advertisement' in relation to any product or service, as an advertisement, which- (i) falsely describes such product or service; or (ii) gives  a  false  guarantee  to,  or  is  likely  to  mislead  the  consumers  as  to  the  nature,  substance,  quantity  or quality of such product or service; or (iii) conveys an express or implied representation which, if made by the  manufacturer  or  seller  or  service  provider  thereof,  would  constitute  an  unfair  trade  practice;  or  (iv) deliberately conceals important information.

To safeguard the interests of consumers from unfair trade practices in e-commerce, the Department of Consumer Affairs has notified the Consumer Protection (E-commerce) Rules, 2020 under the provisions of  the  Consumer  Protection  Act,  2019.  These  rules,  inter-alia,  outline  the  responsibilities  of  e-commerce entities and specify the liabilities of marketplace and inventory e-commerce entities, including provisions for consumer grievance redressal.

Under  the  provisions  of  the  Consumer  Protection  Act,  2019,  the  Central  Consumer  Protection Authority (CCPA), an executive agency, came into existence on 24.07.2020. It is designed to intervene, to prevent consumer detriment arising from unfair trade practices and to initiate class action(s), including the enforcement of recalls, refunds and return of products. Its core mandate is to prevent and regulate false or misleading  advertisements  which  are  prejudicial  to  the  public  interest.  In  case  of  false  or  misleading advertisement,  as  per  Section  21(2)  of  the  Consumer  Protection  Act,  2019,  CCPA  may  impose  fines  on manufacturer or endorser upto Rs. 10 lakhs or Rs 50 lakhs in case of repeated violations.

The CCPA  has  notified the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 on 9th June, 2022. These guidelines inter-alia provide for; (a) conditions for an advertisement to be non-misleading and valid; (b) certain stipulations in respect of bait  advertisements  and  free  claim  advertisements;  and,  (c)  duties  of  manufacturer,  service  provider, advertiser and advertising agency. According to these Guidelines, endorser includes an individual or a group or an institution making endorsement of any goods, product or service in an advertisement whose opinion, belief,  finding  or  experience  being  the  message  which  such  advertisement  appears  to  reflect.  These Guidelines  states that due  diligence  is  required  for  endorsement  of  advertisements  such  that  any endorsement  in  an  advertisement  must  reflect  the  genuine,  reasonably  current  opinion  of  the  individual, group  or  organisation  making  such  representation  and  must  be  based  on  adequate  information  about,  or experience with, the identified goods, product or service and must not otherwise be deceptive. It clarifies that where, Indian professionals, whether resident in India or otherwise, are barred under any law for the time  being  in  force  from  making  endorsement  in  any  advertisement  pertaining  to  any  profession,  then, foreigner  professionals  of  such  profession  shall  also  be  not  permitted  to  make  endorsement  in  such advertisement.

Further  to  strengthen  consumer  protection,  the  CCPA  enacted  the  Guidelines  for  Prevention  and Regulation of Greenwashing and Misleading Environmental Claims, 2024 (effective 15th October 2024), mandating  transparency  in  environmental  claims,  and  the  Guidelines  for  Prevention  of  Misleading Advertisements  in  the  Coaching  Sector,  2024  (effective  13th  November  2024),  addressing  false  claims, exaggerated success rates, and unfair practices in coaching institutes.

The CCPA, in exercise of the powers conferred by Section 18 of the Consumer Protection Act, 2019, has issued 'Guidelines for Prevention and Regulation of Dark Patterns, 2023' on 30th November, 2023 for prevention  and  regulation  of  dark  patterns  listing  13  specified  dark  patterns  identified  in  e-Commerce sector.  These  dark  patterns  include  false  urgency,  Basket  Sneaking,  Confirm  shaming,  forced  action, Subscription trap, Interface Interference, Bait and switch, Drip Pricing, Disguised Advertisements, Nagging, Trick Wording, Saas Billing and Rogue Malwares.

Action has already been taken by the CCPA against various entities including e-commerce platforms for affecting consumers, as a class, for violation of consumer rights, false and misleading advertisements and unfair trade practices as defined under the Consumer Protection Act, 2019. Action has also been taken against the sale of domestic pressure cookers that do not meet compulsory BIS standards on e-commerce platforms. Additionally, as per CCPA's directions, travel companies have refunded Rs. 1,454 Crores as of 20.03.2024 to consumers for cancelled flights due to the Covid-19 lockdown. CCPA has also mandated that these companies update their websites with clear instructions and status updates on refund claims related to cancelled tickets. Further, 13,118 listings of car seat belt alarm stopper clips have been delisted from major e-commerce  platforms  based  on  the  Orders  passed  by  CCPA  to  delist  all  such  products  which  violates consumer  rights  and  are  unfair  trade  practice  under  the  Consumer  Protection  Act,  2019 as  the  sale  or marketing of said product compromise with the life and safety of consumer by stopping alarm beep when not wearing seat belts.

Bureau  of  Indian  Standards  (BIS)  introduced  the  framework  on  'Online  Consumer  Reviews  Principles  and  Requirements for their Collection, Moderation, and Publication' on 23rd November 2022. This framework safeguards consumer interests by addressing fake and deceptive reviews in e-commerce. While the standards are voluntary, they apply to all online platforms that publish consumer reviews and are guided  by  principles  such  as  integrity, accuracy,  privacy,  security, transparency,  accessibility,  and responsiveness.

The  Department  of  Consumer  Affairs  has  been  generating  consumer  awareness  by  undertaking country-wide multimedia awareness campaigns under the aegis of "Jago Grahak Jago" to reach out to every consumer  across  the  country  by  utilizing  traditional  media  like  All  India  Radio,  Doordarshan,  fairs  & festivals,  etc.  as  well  as  social  media.  Through  simple  messages  and  jingles,  consumers  are  made  aware about the consumer rights, unfair trade practices, consumer issues and the mechanism to seek redressal. The Department has also been releasing grant-in-aid to States/UTs for generating consumer awareness at local level.  During  the  current  financial  year,  the  Department,  under  consumer  awareness  scheme,  undertook campaigns  through  All  India  Radio  (AIR)  during  T20  World  Cup,  IVRS  (Interactive  Voice  Response System) campaign, Pan-India interaction session with panchayats, for generating awareness about consumer rights, standards, redressal mechanism, etc.

Ministry  of  Electronics  and  Information  Technology  ('MeitY')  has  notified  the  Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 ('IT Rules, 2021') that cast  obligations  on  intermediaries,  including  social  media  intermediaries  and  platforms,  to  ensure  their accountability  towards  safe  &  trusted  Internet  including  their  expeditious  action  towards  removal  of  the unlawful information.

'Police'  and  'Public  Order'  are  State  subjects  as  per  the  Seventh  Schedule  of  the  Constitution  of India.  However, the Ministry of  Home  Affairs  (MHA) has established  Indian Cyber Crime Coordination Centre (I4C) as an attached office to provide a framework and eco-system for Law Enforcement Agencies (LEAs) to deal with cybercrimes in a comprehensive and coordinated manner. The Government has also launched  the  National  Cyber  Crime  Reporting  Portal  (https://cybercrime.gov.in)  to  enable  the  public  to report all types of cybercrimes. Cybercrime incidents reported on this portal are routed automatically to the respective State/UT law enforcement agency for further handling as per the provisions of law. The 'Citizen Financial Cyber Fraud Reporting and Management System' has been launched for immediate reporting of financial frauds and to stop siphoning off fund by the fraudsters. The Ministry of Home Affairs has taken many  steps  to  spread  awareness  on  cybercrime,  which,  inter-alia  include;  dissemination  of  messages through SMS, I4C social media account i.e. X (formerly twitter) (@Cyberdost), Facebook (CyberDostI4C), Instagram  (cyberdostI4C),  Telegram  (cyberdosti4c),  Radio  campaign,  engaged  MyGov  for  publicity  in multiple  media,  organizing  Cyber  Safety  and  Security  Awareness  weeks,  in  association  with  States/UTs, publishing  of  Handbook  for  Adolescents/Students,  newspaper  advertisement  on  digital  arrest  and  other modus operandi of cyber criminals, use of social media influencers to create special posts on digital arrest, digital displays on railway stations and airports etc. The Ministry of Home Affairs has issued advisory to all the State/UT Governments to carry out publicity of National Cyber Crime Reporting Portal (https://cybercrime.gov.in) and Toll-free helpline number '1930' to create mass awareness.

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