Proposed Amendment to Indian E-Commerce Law To Include MLM

Arun Jaitley Indian finance minister


As more Indian direct selling companies take advantage of e-commerce to expand their presence, the Indian government is pushing for a revamp of the Consumer Protection Act to protect the rights of consumers. The proposed amendments take care of new-age online and off-line models, including e-commerce, teleshopping, direct selling or multi-level marketing. 

India’s Finance minister Arun Jaitley stressed the need for a provision where consumers can file class action suits against fraudulent sellers, particularly in the era of e-commerce, which is dynamically changing the marketplace.

Globally, the best practice is you allow class action in these cases. You also have to regulate the extent of reviews and appeals and the grounds on which multiple appeals can be filed, he said. 

Consumer affairs minister Ram Vilas Paswan said consumers were often taken for a ride at three levels.

First, they are allured by misleading advertisements. Subsequently, when they buy an item online, either they don't get it in time or the product they get is sub-standard. There is no relief after you buy an item. The transactions are happening online and the buyer and seller never meet, the minister said. 

Jaitley and Paswan said proposed amendments in the Act will address such concerns and protect consumers' rights.

The volume of trade in ecommerce is only going to increase… That's how trade is going to change. So, under these circumstances, we need a very powerful and efficient (consumer) forum. The manner in which representations are made and the underlying principle of buyer being aware of the nature of goods and services itself will now have to be rewritten, Jaitley said while addressing a conference on working of consumer forums. 

To address these concerns, a clause has been added in the proposed bill stating that transactions made through any mode for buying any goods and hiring or availing any service will be covered under the law. Moreover, the bill allows a complainant to file a case against the seller or service provider from his place of residence rather than at the place of buying. This will put an end to the jurisdiction issue, particularly in case of e-commerce. 


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