CCPA Issues Notices to Ola, Uber for Unfair Trade Practices : Daily Current Affairs

Relevance: GS-2: Statutory, Regulatory and various Quasi-Judicial Bodies, Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Key Phrases: Central Consumer Protection Authority, Right to be Heard, Grievance Redressal, Product Liability, Consumer Education, caveat venditor, caveat emptor

Why in News?

Consumer protection regulator Central Consumer Protection Authority (CCPA) has issued notices to cab aggregators Ola and Uber for unfair trade practices and violation of consumer rights.
Lack of proper consumer grievance redressal mechanism, deficiency in service, unreasonable levy of cancellation charges, and fairness of algorithm used to charge fares are among major issues raised by CCPA
CCPA has given 15-days’ time for these two companies to reply to the notices.
The authority pointed out that a significant number of complaints have been lodged by consumers across the country on multiple issues, which affect their rides booked through both the ride-hailing platforms.

Key Features of the Consumer Protection Act 2019:

It defines a consumer as a person who buys any goods or avails a service for a consideration.
It does not include a person who obtains a good for resale or a good or service for commercial purposes.
It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing, or direct selling.
As per the Act, the central government will set up a Central Consumer Protection Authority (CCPA) with an investigating wing to promote, protect and enforce the rights of consumers.
- The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement.
- In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.
Consumer Rights
- Right to Safety: It means the right to be protected against the marketing of goods and services, which are hazardous to life and property. Before purchasing, consumers should insist on the quality of the products as well as on the guarantee of the products and services.
- Right to be Informed: It means the right to be informed about the quality, quantity, potency, purity, standard, and price of goods so as to protect the consumer against unfair trade practices.
- Right to Choose: It means the right to be assured, wherever possible of access to a variety of goods and services at a competitive price. This right can be better exercised in a competitive market where a variety of goods are available at competitive prices
- Right to be Heard: It means that consumers’ interests will receive due consideration at appropriate forums. It also includes the right to be represented in various forums formed to consider the consumer's welfare.
- Right to Seek Redressal: It means the right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers. It also includes the right to fair settlement of the genuine grievances of the consumer.
- Right to Consumer Education: It means the right to acquire the knowledge and skill to be an informed consumer throughout life. Ignorance of consumers, particularly of rural consumers, is mainly responsible for their exploitation.
Consumer Dispute Redressal Commission (CDRC)
- The District CDRC will entertain complaints where the value of goods and services does not exceed Rs one crore.
- The State CDRC will entertain complaints when the value is more than Rs one crore but does not exceed Rs 10 crore.
- Complaints with the value of goods and services over Rs 10 crore will be entertained by the National CDRC.

Importance of the Consumer Protection Act:

Consumer Interest: It seeks to enhance the protection of consumers’ interests and timely settlement of their grievances.
Grievance Redressal: Through Central Consumer Protection Authority (CCPA) it empowers citizens to seek redressal at the appropriate level.
Punishment: It promotes the rights of consumers through punishment against misleading advertisements and adulteration of products.
Product Liability: This provision to deter manufacturers and service providers from delivering defective products or deficient services will ensure the safety and health of Indian citizens.
Online Goods: It includes redressal of complaints about online bought goods too.

Key Issues:

Commissions members not specified: The new Act sets up the Consumer Disputes Redressal Commissions as quasi-judicial bodies to adjudicate disputes. The new Act empowers the Central government to appoint members to these Commissions. The new Act does not specify that the Commissions will comprise a judicial member. If the Commissions were to have members only from the executive, the principle of separation of powers may be violated.
Lack of Independence: The new Act empowers the Central government to appoint, remove and prescribe conditions of service for members of the District, State and National Consumer Disputes Redressal Commissions. The new Act leaves the composition of the Commissions to the Central government. This could affect the independence of these quasi-judicial bodies.
Advisory Powers Unclear: Consumer Protection Councils will be set up at the district, state, and national levels, as advisory bodies. The State and National Councils are headed by Ministers in charge of Consumer Affairs. The new Act does not specify whom the Councils will advise. If the Councils advise the government, it is unclear in what capacity such advice will be given.
Duplication and Clashes: Further, since many sectors have their own regulators, duplication or clashes between CCPA and these bodies may arise.

Conclusion:

Consumer Protection Bill seeks to give consumers more power and justice by targeting not only consumer dissatisfaction but also misleading advertisements. This seeks to further timely action on consumer rights through appropriate mechanisms.
Even then several laws meant to protect consumers against such unfair trade practices, false and misleading advertisements continue to exploit the consumers. However, the new Act is commendable for its efforts to move further towards caveat venditor from the days of caveat emptor.
Consumer awareness through consumer education and actions by the government, consumer activists, and associations are needed the most to make the consumer protection movement a success in the country.
Therefore, the domestic products should be of high quality to attract the interest and build the trust of consumers and the government should enact certain standards for the quality assurance of not only the domestic but also the imported products.

Sources: The Hindu Indian Express

Mains Question:

Q. Recently Central Consumer Protection Authority issued notices to Ola, Uber for unfair trade practices. In this context discuss the important features and critically analyze the new Consumer Protection Act 2019?