Old and New Consumer Protection Laws: A Detailed Analysis

Introduction

Consumer protection is a crucial aspect of a well-functioning market economy, ensuring fairness, transparency, and accountability in trade and commerce. It encompasses a broad range of policies and regulations designed to safeguard consumers from unethical business practices, defective products, and substandard services. The First Consumer Protection Act was enacted in 1986, which provided consumers with legal remedies against exploitation, defective goods, and other unfair trade practices. It dealt with the basic rights of consumers such as Right to protection from hazardous goods, Right to be Informed, Right against Exploitation, Right to Seek Redressal and Right to (Consumer) Education.

However, over time, significant changes in market structures, particularly the rapid expansion of e-commerce and digital transactions, necessitated a comprehensive update to the legal framework. The traditional mechanisms were no longer sufficient to address the complexities of modern trade, which include cross-border e-commerce, misleading digital advertisements, and the growing influence of social media in shaping consumer decisions. This led to the requirement of a new statute with relation to Consumer Protection Law, having much advanced methods to deal with new challenges such as privacy breaches, counterfeit goods, and deceptive online sales tactics, requiring more robust and technology-oriented consumer protection laws.

This article provides a comparative analysis of the old and new Consumer Protection Acts, examining their objectives, necessity, and key differences. Additionally, it explores the expanded definition of ‘consumer’ under the Consumer Protection Act, 2019, which includes digital consumers and ensures their protection in an increasingly technology-driven economy.

Definition of ‘Consumer’

A ‘Consumer’ is a person who buys the goods or hires/avails the services in exchange for consideration, with the motive of personal consumption. It includes any such person, belonging to any business/profession, who consumes goods and services in order to fulfill their needs or desires, whether personal, social or economical. Therefore, the consumer is the end-user of any goods or services.

Both old as well as the new Consumer Protection Laws provides for the definition of ‘Consumer’. It states that a ‘Consumer’ is any person who,

” buys any goods (or services) for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods (or services) other than the person who buys such goods (or services) for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods (or services) for any commercial purpose.”

Therefore, the definition clearly outlines the following essential characteristics of a ‘Consumer’:

The person buys goods or services for consideration (which could be fully paid, partly paid, or promised, or under deferred payment).
The definition extends to any person who uses the goods or services, even if they did not directly purchase them, as long as the purchase was made with their approval.

The transaction involves consideration of payment (or a promise of payment) or deferred payment for the goods or services.

The person is not acquiring the goods or services for commercial purposes.

The Consumer Protection laws are enforced in order to protect any such person who comes under the criteria as mentioned above.

Necessity for new Consumer Protection Act, 2019

As discussed earlier, there were several shortcomings with the old Consumer Protection Act (1986), especially in the aspect of latest technologies and advancements in market practices. Some of the basic necessities which made it necessary for new Act are as follows:

The previous consumer protection laws were outdated and failed to address modern challenges like online shopping, e-commerce disputes, and digital transactions, leading to the need for an updated framework. The growth of online markets and increased consumerism highlighted the gaps in the protection of consumer rights in the digital space, requiring stronger laws to safeguard interests.
The introduction of digital content and services raised new issues related to warranties, returns and consumer rights, which led to the rise in unfair trade practices such as misleading advertisements, counterfeit products, and substandard services which needed to be addressed comprehensively.
Consumers faced difficulties in redressal mechanisms due to jurisdictional issues, long delays, and lack of awareness, creating the need for a more efficient and accessible grievance redressal system. The growing awareness and demands from consumers for faster and more transparent mechanisms to resolve complaints and disputes necessitated reform in the existing laws to ensure timely justice.
The need to strengthen the role of regulatory authorities like the Central Consumer Protection Authority (CCPA) for more proactive monitoring and enforcement of consumer protection standards became apparent.
The necessity for harmonizing consumer rights across the country and providing equal protection for consumers in all regions demanded a national law that addresses local variations while providing uniformity.

Therefore, it became necessary for the Central Government to enact a new law, namely, the Consumer Protection Act, 2019; with significant changes and modifications, in order to combat with the modern day challenges faced by the consumers in the markets, and to provide for more efficacious remedies.

Key changes in new Consumer Protection Act, 2019

Expanding Scope for the definition of ‘Consumer’:
- As per the demand of the modern times, the Act has been successful in expanding the scope of the definition of ‘Consumer’ as per the introduction of digital markets and online platforms. The Act now also includes online consumers—individuals who engage in e-commerce transactions. This ensures that consumers who buy products or services through digital platforms are protected under the law.
- Under the Explanation (b) of the definition of ‘Consumer’ under section 2(7), the official gazette has added that the expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.
Establishment of CCPA (Central Consumer Protection Authority):
- The new Act has also enforced the establishment of Central Consumer Protection Authority in order to regulate consumer rights, unfair trade practices, and false advertising, ultimately providing the platform for protection of consumers at the Central level.
- As per Section 10 of the Act, the Central government shall, by notification, establish the CCPA to regulate matters relating to violation of rights of consumers, unfair trade practices etc. For the Authority, it shall consist of a Chief Commissioner and such number of other Commissioners as may be prescribed, to be appointed by the Central Government to exercise the powers and discharge the functions under this Act.
- CCPA has several powers, including investigation, recalls, reimbursements, license cancellations, penalties, class action suits etc. CCPA’s main role is to protect consumers from unfair trade practices and to ensure that their rights are not violated.
Regulation of E-commerce platforms:
- The 2019 Act also addresses the complexities introduced by the digital marketplace. It incorporates specific provisions to regulate e-commerce platforms, ensuring transparency and accountability in online transactions. This includes mandating e-commerce entities to provide clear information about the goods or services they offer, including details on warranties, return policies, and dispute resolution mechanisms.
- Section 94 of the act provides the Central Government to take effective steps as per the manner prescribed, for the purposes of preventing unfair trade practices in e-commerce.
Establishment of Mediation cells:
- In order to facilitate rapid, faster and better mode of dispute resolutions, the Act has established Mediation Cells for parties to discuss the issues personally under the Mediation, before approaching to the courts and tribunals for the resolution. It is a reformative step taken by the legislation, as under the old Consumer Protection Act, people had the only option to rely upon the formal legal proceedings before the court to obtain for proper resolution.
- This is provided under Section 74 of the new Act that both State as well as the Central Governments shall establish the Mediation cells, to be attached with the District, State and National Commission.
Unfair Trade Practices and False Advertisements
- The Act provides strict penalties for manufacturers, service providers, and endorsers involved in false or misleading advertisements. Endorsers, such as celebrities, can be held accountable for the false claims made in advertisements.
- There are provisions for immediate action to curb unfair trade practices, including banning false advertisements and charging hefty fines.
Filing of E-complaints:
- In order to raise a complaint regarding unfair trade practices, defective goods or services and other such issues, the consumers can now approach the online consumer portals to file a complaint under the provisions of the new Act.
- It is given under the proviso of Section 35 of the new Act, that the complaint may be filed electronically as per the manner prescribed. Therefore, it facilitates the e-filing of complaints in order to provide convenience to the consumers while approaching the authorized institutions for redressal.

The Consumer Protection Act has made several changes apart from those mentioned above, such as increase in the monetary limits, strict actions and penalties, liabilities for the offenders and facilitating protection of consumers against one sided contracts, misleading advertisements and other kinds of exploitations. It not only facilitates faster and smooth redressal mechanisms, but also focuses on recognizing online frauds and offences and provides for suitable strict punishments for the same.

Criticisms and Challenges

The Consumer Protection Act, 2019 has laid a strong foundation for safeguarding consumer rights, but its effective implementation will determine its long-term success. Future endeavors must focus on ensuring better awareness, enforcement, and adaptation to evolving market trends. Strengthening digital infrastructure for e-filing complaints, enhancing mediation mechanisms, and improving coordination between regulatory authorities and consumer forums will be key priorities. Additionally, continuous amendments may be required to address emerging challenges in artificial intelligence, data privacy, and cross-border e-commerce transactions.

Despite its progressive reforms, several challenges remain. Ensuring uniform implementation across different states, reducing delays in consumer dispute resolution, and tackling the rise of fraudulent online marketplaces require constant vigilance. The enforcement of penalties for misleading advertisements, particularly in the digital space, needs to be more robust. Moreover, small businesses and traders must be educated about their obligations under the Act to ensure fair trade practices without unintended legal consequences.

Conclusion

The Consumer Protection Act, 2019 strengthens consumer rights by addressing challenges in e-commerce, digital transactions, and unfair trade practices. It establishes the Central Consumer Protection Authority (CCPA) and mediation cells for efficient dispute resolution, easing court burdens. The Act introduces e-filing of complaints, higher pecuniary jurisdiction, and stricter regulations on endorsements and advertisements. By reflecting market changes, it ensures stronger consumer protection and digital rights, promoting a more consumer-focused legal framework in India. Success depends on proactive regulation, technological progress, and informed consumers.