Lok Sabha

December 20, 2018

Pratima Mondal speaks on The Consumer Protection Bill, 2018

Pratima Mondal speaks on The Consumer Protection Bill, 2018


Madam, I rise to speak on The Consumer Protection Amendment Bill, 2018; the original Bill was enacted in 1986. The emergence of the global supply chain, the rise in global trade and the rapid development of e-commerce have led to a new delivery system for goods and services, and have also provided new options and opportunities for consumers.

Equally, it has rendered the consumer open to various forms of unfair trade and unethical business practices. Misleading advertisements, telemarketing, multi-level marketing, direct selling and e-commerce have created new challenges to consumer protection that will require appropriate redressal to prevent consumer detriment. It is therefore commendable that the Government has embarked on modernising the legislation on consumer protection, thus keeping pace with the changes in market to ensure fair, equitable and consistent outcomes for the consumer.

The Consumer Protection Bill, 2018 seeks to replace the earlier Act in order to redress the emerging consumer concerns in the present-day scenario. The Bill enforces consumer rights and provides a mechanism for redressal of complaints regarding defects in goods and deficiencies in services. The Consumer Disputes Redressal Commission will be set up at the district, State and national levels for adjudicating consumer complaints. Appeals from the district and state commissions will be heard at the next level and from the national commission, by the Supreme Court.

The Bill sets up a Central Consumer Protection Authority to promote, protect and enforce consumer rights as a class. It can issue safety notices for goods and services, recall orders and make rules against misleading advertisements. The Bill has several provisions aimed at simplifying the consumer disputes adjudication process of the consumer dispute redressal agencies, besides enabling consumers to file complaints electronically.

The Bill sets up the Consumer Disputes Redressal Commission as a quasi-judicial body to settle disputes. The Bill empowers the Central Government to appoint the members to this commission but the Bill does not specify that the commission should have a judicial member. If the commission was to have members only from the executive, the principal o separation of powers may be violated. The Bill confers power to the Central Government to appoint and remove members, and provide conditions of service for members of the district, State and Nation Consumer Disputes Redressal Commission.

But the Bill leaves the composition of the commission to the Central Government. This can affect the independence of these quasi-judicial bodies. The Bill sets up the consumer protection councils at the district, State and national levels as advisory bodies.

The State and national councils are headed by the Minister-in-Charge, Consumer Affairs. But the Bill does not specify as to who will advise these councils. If the councils are to advise the Government, it is unclear as to on what basis advice will be given.

The Bill proposes severe penalty for manufacturers under the service providers for false and misleading advertisements, including a fine of up to Rs 50 lakh and jail up to five years. However the process of implementation needs clarity. What is misleading and who will define what is misleading. Explicit guidelines are needed to know what is misleading and what is not.

The Bill states that penalty can be imposed on the endorser who could be a celebrity. But the provision of improvement is not applicable to the endorsers. Celebrities are not liable to jail terms in this Bill and will also be protected from the indemnity bond signed with the brand.

The Bill further states that the penalty has to be determined by the population, the area affected by offences, frequency and duration of offences, vulnerability of class and persons affected likely to be adversely affected and the gross revenue generations from sales. It says that no endorser would be liable to a penalty if he or she has exercised due diligence to verify claims. But Madam, there is no clarity on how an endorser can verify due diligence. This can create a regulatory loophole and keep the celebrity out of the purview of prescribed penalty.

Madam, on one hand this Bill has severe penalty provisions for the endorsers and on the other hand this Bill is giving them a root to get away because of the clause of ‘due diligence’ will act in their defence. This clause negates the provisions of this Bill and may not serve the purpose for which it has been proposed.

Madam, the Bill puts the onus on celebrity to verify the correctness of the claims regarding the goods and services of a brand before endorsing the same. If they fail to do so celebrities may be prohibited from making any advertisement for any product or service for one year extendable to three years for every subsequent contravention. It will act as a deterrent for a number of manufacturers when it comes not just to communications but more importantly adulteration of products.

Madam, the other hurdle is the implementation and the concept is misleading as there is no repository for the consumers, where the consumers or celebrities can verify the claims. Where will the consumer go if they have a specific query? Many consumers now do that on social media and some brands do respond but where is the recourse of the consumers when the brands do not respond. How can the consumer verify that what a brand is claiming it is genuine? Even the celebrities cannot verify the same if the consumer cannot do so. A formal reservoir of knowledge, products and brands would be necessary where the consumer can verify the claims.

Lastly Madam, considering the impact of celebrity endorsement on consumer products or choice situation is more damaging in advertisement of food products because it can impact on public health. Madam, popular food and beverages, sugar, salt or fat content which have been advertised by celebrities including products like noodles, potato chips and digestive biscuits etc, some of which are often positioned as healthy food alternatives.

Madam, people tend to see the only the positive highlighted part of any products and not the negative potential impacts. For example, noodles- advertised as a whole grain food with real vegetables but nowhere is it mentioned that instant noodles have high salt and fat contents. Madam, celebrities or endorsers may also not be able to understand the scientific compositions of the food products and the science behind the claims. Therefore to deal with the situations like these it is maybe a better option to ban the celebrity endorsement completely. With this Madam, I on behalf of my party support the Bill with hope that the Hon. Minister will see my points as I have raised here.

Thank You, Madam.