Regulating Unfair Trade Practices: an Analysis of the Past and Present Indian Legislative Models

The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) which for the first time incorporated detailed provisions as to unfair trade practices (UTPs) in India has now been repealed and succeeded by the Consumer Protection Act, 1986 which has included the same substantive definition of UTPs. This article analyses the law as to UTPs under the repealed MRTP Act including the cases decided thereunder and compares it with the structure of the Consumer Protection Act with the objective of evaluating whether the present Consumer Dispute Redressal Agencies under the Consumer Protection Act have adequate substantive provisions and effective procedural competence to ward off UTPs. Our analysis of legislative provisions and decided cases shows that the present system of protection against UTPs under the Consumer Protection Act is blighted by a strict and restrictive definition of consumer; lack of in-house enquiry and investigation system, incompetency of traders and trade associations to pursue cases, and lack of inherent power of the Consumer Dispute Redressal Agencies to suo motu take up matters. The article uses analytical and statistical methods to quantify, in terms of actual effect, these drawbacks which significantly hamper the present system and suggests various means to improve the functioning of the system so as to effectively deal with UTPs.     

Consumer Protection Act, 1986: Law and policy in India

India passed its new Consumer Protection Act in 1986. The author points out that the Act is a landmark in the history of the consumer protection movement in India. It concerns mainly the regulation of consumer disputes and creates specific redress agencies at district, state, and Union level. It also contains general provisions for consumer rights and for the organization of the consumer interest.

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Verbraucherschutzgesetz 1986: Recht und Politik in Indien

Zusammenfassung Nach Meinung des Autors handelt es sich bei dem neuen indischen Verbraucherschutzgesetz um einen Meilenstein in der Verbraucherschutzbewegung dieses Landes. Das Gesetz betrifft vor allem die Regelung von Konsumentenstreitigkeiten, für die es eigene Einrichtungen und verfahren auf Distrikt-, Provinz- und Unionsebene schafft. Das Gesetz enthält auch allgemeine Verbraucherrechte und einen organisatorischen Rahmen zur Verbrauchervertretung.

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Rajendra Kumar Nayak is an Associate Research Professor at the Indian Law Institute, Bhagwan Dass Road, New Delhi-110001, India, and Member, Central Consumer Protection Council, Government of India.     

The Evolution of Consumer Product Safety Policy and Regulation in India

Consumer product safety in India is undergoing a series of structural reforms, encompassing general consumer protection and specific product safety regulation. This article critically examines the state of consumer product safety as it has developed since the adoption of the original Consumer Protection Act 1986 and Bureau of Indian Standards Act 1986 and on that basis puts forward a first reasoned analysis of the major reforms currently under discussion (the Consumer Protection Bill 2015) or recently passed but not yet implemented (the Bureau of Indian Standards Act 2016). The analysis is framed against the backdrop of a preliminary discussion of the constitutional architecture of India, which is in itself a source of complication in the development of coherent consumer policies. The picture emerging from this article shows that, while progress is being made, the field of consumer product safety in India is a difficult work in progress where policy and regulatory developments are hard to achieve incrementally, and structural reform come at the cost of fundamental choices the feasibility of which might prove difficult.     

Verbraucherpolitik als gewerkschaftliche Aufgabe

Trade unions and consumer policy. In the first part of his essay, the author discusses the position of the DGB (Deutscher Gewerkschaftsbund), the largest and most important of the West German trade unions, in the field of consumer policy. Consumer policy has been part of the statute of the DGB since 1971. Trade unions in West Germany regard themselves as consumer organisations because their members are consumers as well as employees, and consumer policy is understood to be part of the general economic policy of the unions. In 1975, the congress of the DGB accepted a programme of consumer policy. The programme demands that consumers rank equal with producers in the market. This goal should be reached by price competition (as a dominant factor of competition), by transparency (Markttransparenz) of prices and quality, and by the appointment of an ombudsman as a legal caretaker of consumer interests. The DGB rejects new consumer organisations, because in its view the trade unions constitute a well organised consumer institution. There is some cooperation, however, with the Arbeitsgemeinschaft der Verbraucher, the chief German organisation for consumer affairs. The author disagrees with legal writers who deny trade unions a right of claim against unfair competition and against unfair standard contract clauses, according to para. 13 of the German Unfair Competition Act. In the second part of his essay, the author analyses the legitimation of trade union consumer policy. The discussion concerns the question of whether or not employees are the only consumers who are in need of protection, and if there is a conflict between their interests as employees and as consumers. The author suggests that legal consumer protection should shield only individual persons as buyers (not small firms, for example). Furthermore, consumer interests should be defined from the perspective of the consumer who is anemployee. A consumer who is at the same time an employer, does not need protection because he can compensate for the disadvantages sustained in his consumer role by exploiting his position as an employer. Conversely, the employee-consumer has the weaker position in both of his roles. Another important question is whether or not there is a conflict between a high standard of consumer protection and a high level of wages. The author cites some economists who suggest that this conflict may be resolved, and that the real conflict is not between consumers and employees, but between those two on the one side and business on the other. The author draws the conclusion that there exists a theoretical legitimation for trade unions to represent the consumer interest. There is a wide gap, however, between the programmes of the trade unions and their policy as evidenced by their everyday activities. The hope is expressed that this gap will become narrower.     

Consumer Protection Law in Ethiopia: The Normative Regime and the Way Forward

The 1960 Civil Code of Ethiopia and other laws have been providing a certain level of protection to consumers until the enactment of laws – in 2010 and 2014 – that expressly deal with consumer protection. This article examines consumer protection in Ethiopia with prime attention to the Trade Competition and Consumer Protection Proclamation No. 813/2013 (enacted in 2014). The social context which prompted the enactment of specific consumer laws in Ethiopia, sources that have influenced Ethiopia’s consumer law regime, rights of consumers, obligations of business persons, regulatory enforcement schemes and some features of consumer protection in digitalized services are highlighted. Moreover, the article briefly deals with the way forward regarding consumer enablement as a path to the effective implementation of consumer rights to choice, safety, information and redress. It is argued that the articulation of specific consumer laws can hardly be implemented unless consumers are adequately empowered to secure their rights and entitlements through effective redress which should include public interest litigation, class action and enhanced civil society engagement.     

Consumers’ subjective and objective consumerism knowledge and subsequent complaint behaviour concerning consumer electronics: a South African perspective

Although there is immense international support for consumer protection, the notion exists that consumer protection can only exist in developed countries with ample fiscal resources and expertise to properly act in the interest of consumers. This conception leaves consumers in emerging and transitional economies in a difficult position as these economies indeed generally lack sufficient funding and the required capacity to educate consumers on their rights. With the South African Consumer Protection Act that came into effect in 2011, South African consumers can now claim to be among the best protected consumers in the world. However, many consumers are still not aware of their consumer rights, and do not have the necessary knowledge to pursue redress when they are dissatisfied. The objective of this research was therefore to explore and describe the relationship between consumers’ knowledge of consumerism (consumer protection) and their consumer complaint behaviour (CCB) concerning their dissatisfaction with a technologically advanced product, in this case, a consumer electronic product. This study attempts to differentiate between subjective consumerism knowledge and objective consumerism knowledge and by extension the measures used. In addition, we explored and described the relationship between demographic variables and levels of subjective and objective consumerism knowledge as well as the combined effect of the two types of knowledge on CCB. The findings revealed that the respondents had a reasonable level of subjective consumerism knowledge relative to a low level of objective consumerism knowledge. No significant relationship was found between subjective consumerism knowledge and demographic variables. However, the factors of race, gender and level of income were related to objective knowledge. A higher level of subjective knowledge could be associated with public action. Respondents with reasonable levels of objective knowledge were also better equipped to take private and public action. CHAID (Chi‐Square Automatic Interaction Detection) analysis highlighted that a combination of subjective and objective knowledge was the best predictor of taking public action only and of taking both private and public complaint action. The study has implications for policy makers, consumer protection organisations, retailers and the individual consumer. Our approach to measuring knowledge of consumerism could possibly be applied in other emerging contexts where consumers generally lack awareness of consumer protection.     

Der österreichische Entwurf eines Konsumentenschutzgesetzes

The report gives information about origins, aims, and contents of the Austrian bill for a Consumer Protection Act which has been submitted to the National Council (Nationalrat) of the Austrian Parliament and will be heard in the Justice Committee (Justizausschuß). The bill aims at a far-reaching protection for the consumer in the field of contract law, excluding, however, product liability and certain specific contracts (such as travelling and correspondence courses). The main points of the bill are as follows:

1. The consumer will be protected in instances of doorstep contracts by granting a cooling-off period of one week. Certain clauses in contracts to the detriment of the consumer will be void, for instance, clauses which limit the validity of oral representations, and clauses in standard form contracts which the consumer did not have reason to expect (überraschende Klauseln). The judge will be accorded the right to lower penalties stipulated in contracts. The right of the consumer to get the contract annulled will be strenghtened in cases oflaesio enormis (i.e., where the stipulated price exceeds the true value by more than one half).
2. The consumer will be protected against unfair contents in standard form contracts. The bill foresees two legal means of protection. (a) A general clause to be introduced into the Austrian Civil Code (Art. 879 § 3) will void all stipulations in standard form contracts, which unfairly deprive the consumer of his rights, and which have not freely and reasonably been consented to by the consumer because they were contained in standard forms of the other party or because this party exploited its superiority when putting them into the contract. In addition, the bill voids specific clauses, not only in standard form contracts but also in individual contracts (e.g., exemption clauses with regard to warranties or breach of contract). (b) The bill institutes a collective action which enables certain associations (workers' chambers — Arbeiterkammern, chambers of commerce — Wirtschaftskammern, trade unions, the Association for Consumer Information — der Verein für Konsumenteninformation) to bring action against anybody using illegal standard form contracts.
3. The bill contains provision for forbidding certain unreasonable clauses regarding, e. g., bills of exchange, the use of wage claims as security, and jurisdiction clauses.
4. The bill will incorporate the Instalment Sales Act (Ratengesetz) into the new Consumer Protection Act, thereby extending its sphere of application to most transactions between businessmen and consumers.

     

Policies and practice in Denmark and Sweden

Abstract: Danish laws regulating banking and financial services organizations have no consumer protection provisions, although there is one law regulating a particular kind of payment instrument, the Payment Cards Act. However, general consumer protection law applies to banks and other financial services organizations, as well as other kinds of business. In particular, the Marketing Practices and Price Marking and Price Display Acts give responsibilities to the consumer ombudsman. This legal framework is complemented by guidelines issued – after consultation – by the consumer ombudsman, for example on conduct of business in bank advice, mortgage business and distance selling involving payment cards. The Danish system may be summarized as providing for standards of business behaviour laid down in general terms by law, backed by a supervisory authority with little power of coercion but playing an important role in influencing businesses to adopt high consumer protection standards and in negotiating solutions to problems as they emerge. The Swedish system is generally similar, but less advanced in the use of guidelines for the conduct of business. Both countries provide consumers who have unresolved complaints with easy access to alternative dispute resolution systems and the courts are rarely used to establish case law.     

Adult consumer education across Europe – redressing the market or reaching the vulnerable consumer

Consumer education is an important EU and United Nations priority. In most countries’ formal education systems, it is not a single discipline in its own right, but a cross‐curricular subject involving many areas of the school curriculum. Adult consumers are expected to be critical and informed consumers but may not know how to acquire the appropriate skills. The formal school system in many countries has failed to deliver these skills and values and adults need consumer education through both formal and informal means. With increasingly varied societies consumer education will help to produce active socially responsible citizens and citizenship is an essential element of the delivery of consumer education to adults. It is particularly important that consumer education should reach the vulnerable groups in society. Increasing globalisation and business power necessitate ethical and sustainable business practices; an informed, educated and empowered consumer will strengthen the market place to the benefit of both consumers and business. Unlike school education, adult education across Europe is fragmented with a mixture of formal education, including training for vocational qualifications, continuing and community education, and informal education, an essential contributor to life‐long learning delivered through media, women's groups, consumer groups and many other large and small organisations. The issues have been addressed by the EU Socrates supported CEA (Consumer Education for Adults) project which has 10 partners from 7 European countries drawn from non‐government organisations, teacher training and adult education institutions, universities and research institutes. The project has produced a training manual for adult consumer education, a training module, piloted in Vienna, which includes a handbook of teaching materials and a video, and has initiated a dialogue between consumers, consumer educators, business and producers.     

Financial information for consumers: A future strategy for consumer organisations

The consumer is faced with increasingly complex decision-making in relation to financial services. His or her information needs are growing more sophisticated and comprehensive. At the same time, the supply of many financial services to consumers is becoming increasingly internationalised. It is suggested that national consumer organisations should work in collaboration to identify consumers' financial information needs, to develop a shared testing programme for internationally available financial services and to share experience in developing information and communications technology-based personal financial advice.

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Verbraucherinformation über Finanzdienstleistungen: Eine zukünftige Strategie für Verbraucherorganisationen

Zusammenfassung Verbraucherentscheidungen in finanziellen Fragen sind schwieriger, der Informationsbedarf der Konsumenten ist umfassender und komplexer geworden. Da gleichzeitig viele finanzielle Dienstleistungen in internationalem Rahmen angeboten werden, schlägt der Beitrag vor, daß die nationalen Verbraucherorganisationen in internationaler Kooperation den Informationsbedarf der Konsumenten zu finanziellen Fragen erfassen. Außerdem sollte ein Programm zur Prüfung und Bewertung von international angebotenen finanziellen Dienstleistungen entwickelt werden.

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Jeremy Mitchell was until the end of 1986 Director of the National Consumer Council (UK) and now works independently as Consumer Policy Adviser to voluntary and consumer organisations at 214 Evering Road, London E5 8AJ, UK. The paper was given to the Thirtieth Anniversary Seminar of Association des Consommateurs/Verbruikersunie at Louvain-la-Neuve, Belgium, on 11 June 1987.     

The development of consumer protection in Saudi Arabia

The development of consumer protection in Saudi Arabia is of interest for a number of reasons. First, Saudi Arabia presents a unique combination of size, stage of development of the economy and wealth, coupled with strictness of Islamic observance. Second, consumer protection in the Saudi context has received very little attention from researchers. Despite the richness of Islamic teachings on the conduct of business and trade, very little has been written on consumer protection in Islamic societies other than discussions of financial markets and consumer credit and monopoly. This article briefly explores the background to the emergence of consumer protection in Saudi Arabia. Consumer credit and financial markets are excluded from the discussion. Islamic (Shari’ah) law is analysed as a basis for the regulation of consumer affairs; this system of law is then compared in its major outcomes for consumers with legal systems in advanced Western economies. The development of secular commercial law during recent times in Saudi Arabia is also considered as a parallel development to those in Shari’ah. Both strands of development are then set in the context of Saudi Arabia's 5‐year development plans and the changing position of consumer policy issues is tracked through successive plans. The institutional location of consumer policy within the Saudi government system is discussed before finally considering the changing nature of the Saudi consumer and the possible future for consumer protection in the country.     

Consumer education in the UK: new developments in policy,strategy and implementation

Consumer education is an integral part of the European Community's consumer policy. It plays a key role in consumer empowerment, helping consumers gain the skills, attitudes and knowledge they need to be able to gear the choices they make as consumers to their economic interests and to protect their health and safety. In its policy statement, the Directorate General for Health and Consumer Protection states that the European Community is aware that joint measures at national and Community levels should be more structured, in order to achieve maximum effectiveness. This paper aims to set out the current policy and strategic context for consumer education and empowerment in the UK; review the role of UK government bodies and other agencies concerned with developments; review recent literature; present the results of interviews with an extensive range of key stakeholders and the results of a survey of service heads for trading standards throughout the UK. It will consider implementation, partnership, resources, ideas and opportunities. The research found that the agenda for consumer education in the UK is at an interesting stage of development. The Enterprise Act 2002 gives the Office of Fair Trading (OFT) a statutory power to carry out educational activities. Consumer education is also moving up the agenda in the trading standards service. In addition, the teaching of citizenship in English schools is already stimulating new developments in consumer education. The paper will consider the need for organizations like these to work together to build on these policy developments and ensure that consumer education gains the profile it needs to influence consumer attitudes and behaviour.     

Consumer law in Argentina and the MERCOSUR

The paper reports on the new Argentine Consumer Protection Act (CPA) which was adopted by the Parliament in 1993 but partially vetoed by the President. It aims at creating a specific system of consumer protection law, thereby extending the already existing provision of the Argentine Civil Code and special market legislation. The CPA tries to improve the position of the consumer in the marketplace and vis-à-vis public services before, during and after conclusion of a contract. It contains provisions on conciliation, access to justice, and collective redress. It attaches great importance to the establishment of consumer associations and to consumer education. Finally, the author looks at the importance of the CPA for regional integration in South America through MERCOSUR.

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Zusammenfassung Verbraucherrecht in Argentinien und der südamerikanische WirtschaftsverbundDer Beitrag berichtet über das neue argentinische Verbraucherschutzgesetz, MERCUSUR. das vom Parlament im Jahre 1993 verabschiedet wurde, gegen das aber der Präsident teilweise Einspruch erhoben hat. Dieses Gesetz strebt die Schaffung eines Verbraucherrechtes an, das über die bereits existierenden Bestimmungen des argentinischen Zivilrechtes und einzelner spezieller Marktgesetze hinausgeht. Es versucht, die Rechtsstellung des Konsumenten auf dem Markt und gegenüber öffentlichen Dienstleistungen sowohl vor, als auch während und nach Abschlu\ von Kaufverträgen zu stärken. Es enthält Regelungen zu Fragen der Schlichtung, des Rechtszuganges und der öffentlichen Rechtshilfe. Es legt starkes Gewicht auf die Entwicklung von Verbraucherorganisationen und von Verbrauchererziehung. Am Ende des Beitrages analysiert der Autor die Wichtigkeit des neuen Gesetzes für die Integration Argentiniens in den südamerikanischen Wirtschaftsverbund MERCUSUR.

     

Zielsetzungen und Instrumentarien der europäischen Verbraucherrechtspolitik: Eine Analyse von Entwicklungen im Bereich des Zivilrechts

Objectives and instruments of European consumer policy: An analysis of developments in the area of civil law. The paper discusses the relationships and conflicts between the objectives pursued by European consumer policy and the means which are at its disposal. As a first step, the theoretical assumptions of this policy are analysed by an evaluation of the EC Programme for a Consumer Protection and Information Policy of 1975 and of the draft directives on product liability, on misleading and unfair competition, on doorstep sales, and on correspondence courses. It is suggested that the European approach toward consumer protection largely corresponds to the policies prevailing at the national level: Consumer protection is seen as a supplement to the traditional market and competition policy which used to be restricted to regulating competition between producers or suppliers of goods and services, whereas the new policy focuses on the relations between producers and consumers. Nevertheless, consumer policy adheres to the basic presumptions of market economy. It presupposes that the demands of the consumer have to be articulated and satisfied via market processes. It therefore primarily relies on regulations directed against misleading advertising, on protecting justified expectations as to the quality of goods or services by providing redress for losses sustained, and by endeavours aimed at securing a more rational behaviour of the individual consumer. The most important means to promote this policy on the European level are the directives which aim at consonance among national laws (Art. 100 EC Treaty). This is indicative of a market orientation of consumer policy in so far as the harmonization of law is seen as a device for overcoming discriminating effects or distortions of competition created by the differences among national laws thereby furthering a better functioning of the Common Market (Art. 3 h EC Treaty). This accordance of consumer policy and harmonization policy does not rest on firm ground, however. In consumer policy it becomes more and more obvious that the efforts to protect the interests of the consumer lead to further interventionist activities. This process also reveals the need for systematic adjustments or consultations between consumer policy and other fields of politics. A harmonization policy which is primarily centered on breaking down trade barriers and on overcoming discriminating effects of competition cannot respond to the needs and problems of such interventionist activities. Therefore, the harmonization of consumer law should be conceived as a process of formulating broader policies directed at a congruous development of the economic sphere and at an improvement of the living conditions in the Common Market (cf. Art. 2 and the preamble of the EC Treaty). Legal techniques which might be adopted to support such an orientation are (a) in the EC directives to lay down minimum standards for the national legislation, (b) to use a conflict-of-laws approach which would allow to respect and try to coordinate legitimate interests in the application of national consumer policies, and (c) the development of special rules responding to the international aspects of the exchange between producers and consumers. At present, however, European policy gives hardly any attention to the chances and problems of such an approach requiring a complicated coordination of the various legal techniques.     

Dissemination of Consumer Law and Policy in Tanzania

This paper discusses the current consumer protection laws status in Tanzania with special focus on selected areas, including product safety and product liability, quality of goods and services, and telecommunication consumer protection. A case study on status of consumer protection in Tanzania is rendered to reveal the realities of consumer protection in the country. The paper also reflects the desired state of consumer protection in the country and how it can be achieved. Furthermore, the paper highlights the influence laws from other jurisdictions and international organisations have on the Tanzania consumer protection laws and regime.     

Consumer rights of the elderly as vulnerable consumers in South Africa: some comparative aspects of the Consumer Protection Act 68 of 2008

Although consumer protection is not a new concept in South African law, the Consumer Protection Act 68 of 2008 (CPA) now provides for a much more comprehensive and encompassing mechanism to protect consumers. Consumers are protected, not only in the provision of goods and services, the conclusion of contracts but also in the promotion and marketing thereof. The CPA further provides special protection to a particular type of consumer which is the vulnerable consumer and includes elderly consumers. Importantly, and for the first time in the history of South African law, the consumer is provided with eight core fundamental consumer rights. As this contribution is an attempt to provide an interdisciplinary analysis from a legal perspective, identification of what is considered to be an ‘elderly' consumer, needs to be assessed by referring to relevant empirical studies from both an international as well as South African perspective. The focus of this study is on the protection of the elderly as a category of vulnerable consumers in terms of the CPA. The investigation will attempt to show that the elderly is protected in terms of all eight of the fundamental consumer rights within the CPA. Special reference will be made to two fundamental rights of the consumer in terms of the CPA. First, the elderly consumer's right to equality in the consumer market (Part A of the CPA) which provides additional protection as the CPA also refers to the Constitutional right to equality. Second, the elderly consumer's the right to fair and responsible marketing (Part E of the CPA) which in terms of the research is compared with the EU Unfair Commercial Practices Directive. Certain problems regarding elderly consumers are identified and the importance of consumer rights as well as the implementation of the correct consumer policy is argued.     

Online shoppers in Australia: dealing with problems

Although the Internet is a convenient platform to conduct commercial transactions, consumers are disadvantaged in the online marketplace due to insufficient information about goods and services as well as business and transaction process, lack of access to redress and several other problems. The number of complaints regarding online transactions increased in Australia from 2001 to 2005, and the number of Internet‐fraud related complaints reported to Consumer Sentinel (USA ) also increased from 2003 to 2006. This, in turn, has undermined consumer trust and impeded the growth of e‐retailing as well as added to the fear among e‐consumers of falling prey to online fraud. In spite of this, the nature and effectiveness of e‐consumer protection has not been adequately studied, notwithstanding extensive research into other aspects of e‐retailing. This article examines (i) the level of awareness of the respondents in the survey in Australia of the current policy framework for addressing consumer protection about online shopping in terms of redress; and (ii) the behaviour of the two groups of respondents in this survey who have and have not encountered problems with online purchases. The findings suggest that most respondents are not aware of the following issues, namely (i) which organizations are involved in e‐consumer protection; (ii) government regulations and guidelines; (iii) industry codes of conduct; (iv) self‐regulatory approaches adopted by business; and (v) the activities of consumer associations to protect consumers in the online marketplace. The findings also show that most respondents would seek redress if they were unhappy with their online purchases and if they knew how to proceed, and that most of them would settle disputes directly with e‐retailers. Also, online shoppers who had encountered problems were more likely to continue purchasing via the Internet than online shoppers who had not encountered any problems. This suggests that respondents find that the benefits offered by e‐retailing outweigh the risks associated with it.     

Consumers' Perspectives on Mandatory versus Voluntary Provisions of Food Safety Regulations in India

This article aims at analyzing the perceptions of consumers on approaches of food safety regulations—mandatory versus voluntary—though a primary survey of 620 urban respondents belonging to six districts of Uttar Pradesh, India. A structured questionnaire was administered personally to randomly selected samples for assessing the consumers' responses on choices of food quality attributes—search, experience, and credence—and their views on who is responsible for food safety provisions. The study establishes the empirical relationship between consumers' food safety concerns in purchase decisions with the approaches of food safety regulations. The relationship between the approaches of food safety provisions and choices of quality attributes with socio-demographic profiles of consumers was also analyzed. The results of this study provide practical implications for policy makers at the right stage when the government is in the process of implementing the Food and Safety Standards Act in the country.