E-Commerce

Electronic Commerce or E-Commerce is a type of

industry where the buying or selling of products or
services is conducted over electronic systems such as the
internet and other computer networks

Customer
Support

Online Store

Internet
marketing

E-Commerce

Shipping/freight

Customer / order
management system

Payment
Solutions

E-shopping, Online Auction, Phishing

Online shopping or E-shopping is a form of electronic commerce
which allows consumers to directly buy goods and services from a
seller over the internet using web browser
Different types of e-commerce are B2B, B2C, B2G, C2C and mobile
commerce
Online auctions are places that people can go in order to buy or
sell goods or services online for a small fee. Anyone can sell an item
and anyone can bid on an item
Phishing is the fraudulent practice of sending emails purporting to
be from reputable companies in order to induce individuals to reveal
personal information, such as passwords and credit card numbers,
online

Liability of E-Commerce Website

Nasscom Vs. Ajay Sood, Delhi HC case, 2005
Although no legislation for phishing, HC held it to be an
illegal act
It defined phishing a misrepresentation made in the course
of trade leading to confusion as to the source and origin of the
e-mail causing immense harm not only misused.
This case achieves a clear milestone as it brings the act of
phishing into the ambit of Indian laws even in the absence
of specific legislation

Similarly, although no specific laws are there for e-commerce,

any fraudulent activity could be defined as illegal by Court of
Law
Sec 79, IT Act, 2000(clause for e-commerce)

Case : Dell Service Centre& Care

Manager Vs. Complainant
Dell Laptop ordered on 23-8-2010 for 42200 rs. Also 2700 rs paid
to extend the warranty by 1 year.
Laptop defected within 7 months, service centre unable to solve the
issue, laptop completely stopped working by 15-6-2012.
Multiple failure identified, but despite of promises Dell didnt
replace the product , Moreover, complainant came to know that dell
has stopped production of this model due to the inherent issues
Complainant requested the Forum to direct the other party to fully
compensate him along with harassment charges.
Forum stated that acceptance to replace the laptop even after expiry
of warranty date itself confirms that this laptop suffer from some
inherent defect.
After much deliberation Forum directed Dell to return only 42200
the price of laptop, although no harassment charges pressed.

Inherently Defective Product

Consumer Privacy In E-Commerce

Some websites extract information from consumers
through a form, and then record data about their users
browsing habit. After collecting user information, the
sites match the data with their personal and
demographic information to create a profile of the users
preferences, which is then used to promote targeted
advertisements or provide customized services.

 Online there are two main ways in which websites collect

user information:

i.

Sites collect information directly through a server

software. Sites often use automatic software logs to do
this

ii.

A third party extracts information from the site

without the consumers knowledge. Sites often place
cookies on websites to extract user information.

Unauthorised Transactions by
Bagittoday
In this case, Ravindra Prasad booked
1 trip of 4 nights and 5 days using his
debit card. This information was used
to book 4 trips in the same name
without the consent of the buyer. The
company offered a blackberry mobile
for booking 4 trips but never sent the
same.

Consumer Protection Act

Set up in 1986 by Parliament of India
To protect the interest of Indian consumers
Consumer forums have been set up for the settlement
of disputes
IMPORTANCE OF CONSUMER RIGHTS
1. Protection against the manipulation caused due to means of unfair trade
2. Protection of health and safety of the consumers for the goods that either the
purchase or are offered as free
3. Protection of the rights wherein the consumers must be informed about the
quality and standards of the product, its freshness etc
4. Right to receive the sincere gripes that have been registered
5. Right to make selection from the varied offers

E-Commerce Consumer Protection Act

Electronic trade done using the electronic technology
that is majorly completed using the internet services
Fast transaction service that require higher protection
and security.
B to B
TYPES OF
ECOMMERCE

B to C

C to C
The consumer Act must be beneficial to all the three different sections that
include government, business and the consumers

Case : Timtara Infosecure Consulting

Online order of Sony Cyber shot DSC-W630 16 MP
digital camera was made for an amount of Rs. 7650/through credit card on 26th June, 2012
Delivery deadline : 10-20 days

Order did not show up for 2 months

Request for cancellation was made on 17th August, 2012
The opposing party agreed for cancellation of order
within 24-28 days and the amount to be refunded in 7-10
days, but failed to do so

Deficiency in Services

Opposite party directed as under:

To refund the amount of Rs. 7650/- to the complainant
paid by him for online purchase of the digital camera
To pay Rs. 3000/- as compensation for mental agony
and harassment caused to the complainant
To pay Rs. 3000/- as costs of litigation

This order be compiled with by the

opposite party, within 45 days from the
date of receipt of its certified copy,
failing which the amounts shall carry
interest @18% per annum from the
date of this order till actual payment
besides payment of litigation costs

Case : 100 BestBuy

Complainant lured into doing online transactions to
receive a Samsung handset
1896 rs deducted but no product received
He complained under Consumer Protection Act,
1986 to get back his money, also made complain
against ICICI bank.
Court stated that bank is not responsible as it was
merely doing its duty.
However continuous absence of the company
representative and secret disposal of the money
proofs their guilt. Hence, they should also pay
3500rs for the harassment

Unfair Trade Practice

Issues linked to e-commerce for

customers

Privacy
Access
Security
Terms and Conditions
Dispute resolutions
Fees and Charges
Fraud
Jurisdiction definition

Lack of sufficient information

The type of information that e-retailers should be required

to provide can be broken down into six categories:
information about the e-retailer
information about the product
information about the sales process

information about the terms of the contract

information about how the consumers personal data will
be dealt with
information about applicable dispute resolution
processes.

Current situation
There is no specific Law/Act directly in regards
to e-commerce
The Consumer Protection Act has been extended
to cover e-commerce as well
Government policy does not allow FDI in
business-to-consumer (B2C) e-commerce, while
it allows 100 per cent FDI in business-tobusiness (B2B) e-commerce

SOECD Guidelines for Consumer Protection in the

Context of Electronic Commerce
OECD Guidelines on Consumer Protection were released in 1999. These Guidelines are
predicated on the basis that consumers should not be offered any less protection when
participating in electronic commerce than they are in other forms of commerce.
Although India is not a member, it works closely with OECD.
The main protections which the Guidelines propose include :
Fair Business, Advertising and Marketing Practices
Sufficient disclosure of relevant information
A clear and unambiguous confirmation process
Proper means of redress in the case of cross border disputes and clarification of
applicable jurisdiction.
A secure method of payment, minimizing the risk of financial loss.
A reliable system of international Alternative Dispute Resolution to provide a workable
alternative to litigation, which may be costly and disproportionate in the case of long
distance transactions

Legal Barriers to E-Commerce (Companies)

Although 100% FDI allowed in B2B e-commerce. However, no
FDI allowed if single or multiple brand retail trading
These restrictions are related only to sales of goods and not
services
Consideration has to be made so that only adults can do the
transaction as contracts with minor is illegal

As there is no dedicated law for e-commerce, companies have

to adhere to multiple rules and regulations such as Indian
Contract Law, IT Act 2000, laws for Intellectual Property
rights etc
Tax issues are creeping in. The Kerala govt. slapped a 54
crore fine on Flipkart and Jabong for sales tax evasion. Also,
Amazon is having tax issues in Karnataka.

Legal Issues
Minors entering into contracts
Stamping of contracts

Data protection (sec 43(A) of IT Act)

Intellectual Property Rights: trade mark, copyright
or patent infringements in online medium
Advertising: truthful & honest representations and
avoid false & misleading claims

Competition: collusive behavior

E-contract
1. Indian Contract Act, 1872 ;free consent; lawful
consideration; adults

2. Section 10(A) of the Information Technology Act, 2000

validates e-contracts
3. Section 3 of Evidence Act approves evidence to be in
electronic form
The Supreme Court in Trimex International FZE Ltd.
Dubai v. Vedanta Aluminum Ltd. has held that e-mails
exchanges between parties regarding mutual obligations
constitute a contract.

Case: Vinod Kumar vs. Shoeb Merchant

& Chairman & Director, Ebay India, 05
On 30/07/05, the complainant purchased a camera mobile hand set
through the website of second respondent by paying an amount of
Rs 6500 by DD on 04/08/05. The handset was supplied.
The set showed defects from second day itself and the battery was
also used one.
Complainant informed this matter and a new mobile (Sony
Ericsson) was replaced with complainant paying an extra amount of
Rs 800.
This handset also turned out to be defective, the complainant
requested to replace this phone as well.
Another mobile namely Sendo X Smart was provided to the
complainant after paying an additional Rs 1300 being the excess
value.
On receipt of the new phone, it was noticed that even this was a
defective one.

 After this, the first opposite party expressed inability to

replace the set and may be able to provide a new battery as
and when he gets the same.
These facts were then brought to the notice of the second
opposite party, who washed its hands by stating that they are
not liable to any transaction after 2 months of the same.
After receiving the notice the first opposite party did not
appear, instead the second opposite party appeared and filed
version and stated that the complainant has not availed any
service for considerations from it. Hence, he is not a
customer. As there was no evidence to show that second
opposite party had collected any amount from the
complainant, he is not liable to compensate the complainant.

 As a result, the forum dismissed the complaint.

The appeal came before the Commission for final
hearing.
The counsel of the appellant argued that the order
passed by the Forum is not in accordance with the
provisions of the social benefit legislation, the Consumer
Protection Act. He submitted the copy of the email
communications between the parties and that the
opposite parties have admitted the defect in the set.
Email was considered a legal communication as per the
Cyber Act, and the Commission saw an apparent error in
the order passed.

Result
The appeal was allowed in part and set aside the
order passed by the Forum.
Commission directed opposite parties to replace the
handset of the complainant which was sold by
opposite party or else pay Rs 7500, and also direct
complainant to produce the impugned mobile set to
the first opposite party within 15 days.
They also were to pay an interest @15% from the
date of the complaint.
Apart from this, Commission directed opposite
party to pay Rs 500 to complainant as expenses of
the appeal.

Bibliography
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