The Consumer Protection Act, 2019

What it does

The Act gives a consumer a remedy against a seller of goods or a provider of services for a defect, a deficiency, an unfair trade practice or a misleading advertisement. It is Act No. 35 of 2019 and it replaced the Consumer Protection Act, 1986. It sets up a three-tier system of Commissions, at district, State and national level, to decide disputes, and it provides for mediation as an alternative.

Two features were new in 2019. The first is the Central Consumer Protection Authority, a regulator with the power to act on a class of consumers and not only on one complaint. It can inquire into violations of consumer rights, order the recall of goods or the discontinuance of a practice, and penalise a misleading advertisement. The second is a chapter on product liability, which makes the manufacturer, the product service provider and the seller answerable for harm caused by a defective product or deficient service.

Who it binds

Manufacturers, sellers and service providers, including those who sell online. The Act reaches electronic commerce platforms, and the rules made under it for e-commerce add duties on information and grievance handling. An endorser of a misleading advertisement can also be answerable. A person who buys goods for resale or for a commercial purpose is generally not a consumer, so most business-to-business disputes are outside it.

What moved out of it

The 1986 Act is repealed. The Act states the pecuniary limits of the Commissions but lets the Central Government prescribe different limits by rules, which it did in 2021, so the limits can change without amending the statute. A dispute that began under the 1986 Act is dealt with under the repeal and savings provision, so a long-pending complaint may still be framed in the old terms.

What has changed, and when

The 2019 Act came into force in 2020, after the Government brought it into effect by notification, and the Authority was constituted shortly afterwards. The rules on e-commerce and on the jurisdiction of the Commissions followed under the Act. The Act does not amend itself often; most developments arrive through rules, guidelines of the Authority and judgments.

What turns on it in practice

For the technology, data and product practice the Act is the consumer overlay on a digital business. The site's note on a deepfake of a chief executive makes the point from the other side: where a fake advertisement or endorsement misleads buyers, the advertising controls of the Act are among the routes available, and the Authority may penalise a manufacturer or endorser for a misleading advertisement. That route is separate from the takedown route under the Information Technology Rules, and a company facing both should keep the two apart.

A product company should read its terms, its advertising and its returns practice against the unfair trade practice and misleading advertisement provisions, because the Authority acts on a pattern and not on a single complaint. An online platform should check whether it is a seller or only a marketplace, since the e-commerce rules treat the two differently.

The product liability chapter matters to a business that supplies hardware or software embedded in goods. A defect that causes harm brings the manufacturer into the claim without the buyer needing to prove a contract with that manufacturer, and the allocation of that risk between manufacturer, seller and service provider belongs in the supply agreements.