Lok Sabha Question No. 3702 (UNSTARRED), answered on 2024-12-18
Subject: Unfair Trade Practices
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: Shri Sukanta Kumar Panigrahi

## Government of India

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

## LOK SABHA UNSTARRED QUESTION NO. 3702 TO BE ANSWERED ON 18.12.2024

## UNFAIR TRADE PRACTICES

3702.   SHRI SUKANTA KUMAR PANIGRAHI:

## Will  the  Minister  of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state

- (a) the  details  of  the  steps  taken  by  the  Government  to  address  the  growing  concerns  of  unfair  trade practices including misleading advertisements, defective products and fraudulent business activities affecting the e-commerce sector;
- (b) the measures in place to ensure timely resolution of consumer complaints;
- (c) whether  the  Ministry  is  considering  amendments  to  the  Consumer  Protection  Act  to  strengthen provisions against unfair trade practices;
- (d) if so, the details thereof including the penalties being imposed on companies engaged in unfair trade practices;
- (e) the  initiatives  being  taken  by  the  Government  to  educate  consumers  about  their  rights  and  the manner in which unfair trade practices are to be identified; and
- (f) the manner in which Ministry is working with State Governments to ensure uniform enforcement of consumer protection laws?

## ANSWER

## miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k jkT; ea=h (श्री बी.एल. वर्मा )

## THE MINISTER OF STATE CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (SHRI B.L. VERMA)

(a) to (f) : 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 Consumer Protection Act, 1986 was repealed and Consumer Protection Act, 2019 was enacted.

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, wherever appropriate, compensation to consumers.

Further, in terms of Section 38 (7) of the Consumer Protection Act, 2019, every complaint shall be disposed  of  as  expeditiously  as  possible  and  endeavour  shall  be  made  to  decide  the  complaint  within  a period of three months from the date of receipt of notice by opposite party where the complaint does not require  analysis  or  testing  of  commodities  and  within  five  months  if  it  requires  analysis  or  testing  of commodities.

To serve the interest of speedy justice to the end consumers, Consumer Protection Act, 2019 states that  no  adjournment  shall  ordinarily  be  granted  by  the  consumer  commissions  unless  sufficient  cause  is shown and the reasons for grant of adjournment have been recorded in writing by the Commission.

"Unfair  trade  practice"  [Section  2(47)  of  the  Consumer  Protection  Act,  2019]  encompasses deceptive  methods  such  as  misrepresenting  product  standards,  falsely  advertising  old  goods  as  new, claiming  unverified  sponsorship  or  benefits,  offering  misleading  warranties,  misrepresenting  prices,  or disparaging  competitors'  goods  or  services.  These  provisions  ensure  accountability,  transparency  and fairness, safeguarding consumer interests in a dynamic marketplace.

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 consumers from unfair trade practices in e-commerce, the Department of Consumer Affairs has also 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 customer 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.

The CCPA has issued 325 notices for violation of consumer rights, misleading advertisements and unfair trade practices etc. The CCPA has also imposed total penalties amounting to Rs. 1.19 cr.  so far.

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. 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.

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 issued the 'Guidelines for Prevention and Regulation of Dark Patterns, 2023' on 30th November,  2023.  These  guidelines  address  and  regulate  13  specific  dark  patterns  identified  in  the  ecommerce sector, aiming to prevent deceptive practices that mislead consumers.

Moreover, the 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.

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