Govt talks tough on errant e-commerce firms

Suggests there is an urgent need to strengthen consumer protection Act to give powers to file class action suits against such companies

Finance Minister Arun Jaitley and Consumer Affairs Minister Ram Vilas Paswan on Friday came down heavily on errant e-commerce firms, with the former suggesting there was an urgent need to strengthen the consumer protection Act to give powers to file class action suits against such companies.

Paswan said with the speed at which such firms were growing, the role of traditional shops would be diminished in the coming years. He said amendments to the consumer protection Act would address all wrongdoings by e-commerce firms. The amendments bring within their ambit buying or selling of goods through any mode, including online, tele-shopping and direct selling.

Both ministers were speaking at a national conference on effective functioning of consumer forums.

"As we pass by, the volume of trade in e-commerce is going to increase...So, that's how the trade is going to change. Under these circumstances, we need very powerful and efficient (consumer) fora," Jaitley said.

Amendments to the consumer protection Act suggest the creation of a separate consumer protection authority, which could file class action suits against companies on its own accord, firms and sellers. Such suits can be filed by a group of people in case a class or category of goods is found defective and a large number of people have been deceived by it.

Though the current Act also gives the National Consumer Disputes Redressal Commission powers to file class action suits, it cannot do so on its own.

Earlier, D K Jain, president of National Consumer Disputes Redressal Commission, had said, "Our common interest is we have to render justice to consumers. One of the provisions is about creation of an authority. It will have suo motu powers to take cognisance of complaints and issues that concern the public at large, what we call class-action... I feel with the present dispensation, it might amount to having two parallel jurisdictions. It might amount to more government and less governance."

Paswan, however, said according to a decision taken at a recent meeting of senior ministers, the proposed consumer authority would only investigate class action suits on its own, cases in which a complaint was filed and, subsequently, refer the matter to the National Consumer Disputes Redressal Commission or a sectoral regulator such as the Telecom Regulatory Authority of India.