When Online Shopping Goes Wrong: How India And UK Protect Consumers In Cross-Border Digital Commerce

Author: Apeksha Saraf and LLB Hons, University of Leeds; Incoming LLM, University of Law

To The Point

Customers now purchase differently thanks to the digital revolution, and cross-border e-commerce between India and the UK is growing in popularity. But when something goes wrong with an online purchase, whether it’s because of faulty goods, non-delivery, or fraud sellers, customers frequently have to navigate a complicated web of international laws and jurisdictions. Through an examination of the adequacy of existing models and identifying key loopholes that expose consumers to risk during cross-border online transactions, this paper contrasts the consumer protection frameworks of India and the United Kingdom within the prism of cross-border digital trade.

Abstract

The global cross-border business-to-consumer e-commerce market stood at $788.5 billion as of 2022 and is expected to become $7,945.2 billion by the year 2032, revealing the booming volume of cross-border e-commerce between the UK and India. The booming volume has acutely brought to the forefront serious consumer protection concerns, particularly regarding jurisdictional powers, right legislation, and enforcement policy. This article provides a comprehensive comparison of the approaches taken by the legal systems of India and the UK in handling customer complaints related to global online sales. This analysis identifies similarities and differences between the approaches of the two countries by analysing the Consumer Protection Act 2019 (India) and the Consumer Rights Act 2015 (UK), as well as current case law and regulatory developments. Although both nations have strong domestic consumer protection laws, the analysis shows that cross-border enforcement is still an issue, leaving protection gaps that are often taken advantage of by sophisticated e-commerce platforms. In the article’s conclusion, standardised methods that could improve consumer protection in the digital era are suggested.

Use of Legal Jargon

Cross- border digital trade is governed by a complex web of international private law, consumer protection legislation, and e-commerce regulations. The concept of the doctrine of forum non conveniens, choice of law principles, and jurisdictional competence becomes important when Indian consumers purchase from UK sites or vice versa. A three-tiered structure consisting of the National Consumer Disputes Redressal Commission (NCDRC), State Consumer Disputes Redressal Commissions, and District Consumer Disputes Redressal Commissions (DCDRC) is established under India’s Consumer Protection Act 2019 to resolve consumer disputes. The Competition and Markets Authority (CMA) enforcement framework, alternative dispute resolution procedures, and county courts are among the remedies made available by the UK’s Consumer Rights Act 2015.

Post- Brexit, new bilateral arrangements for consumer protection cooperation are required since the Brussels Recast Regulation no longer controls jurisdictional disputes between the UK and the EU. Following Brexit, jurisdictional conflicts between the UK and the EU are no longer governed by the Brussels Recast Regulation, necessitating new bilateral agreements for consumer protection cooperation. The legal setting is made more difficult by guidelines pertaining to e-commerce intermediary liability under the UK’s Electronic Commerce (EC Directive) Regulations 2002 and India’s Information Technology Act 2000, even though applicable law is determined by the concepts of lex loci contractus (law of the place of the contract) and lex fori (law of the forum). The newly approved Digital Markets, Competition and Consumers Act 2024, which targets harmful online trade practices and improves the CMA’s enforcement powers, has added more safeguards in the UK.

The Proof

Current data highlights how difficult cross-border e-commerce is. Millions of transactions across platforms took place every day in 2023, marking a significant expansion in the commercial relationship in digital services between the UK and India. More than 2.3 million complaints were filed with Indian consumer forums in 2023, with about 18% involving foreign platforms or providers. Strong legal frameworks are urgently needed, as seen by the large number of cross-border e-commerce disputes that the UK’s Citizens Advice recorded.

Sources: Custom Market Insights Global Cross-border B2C E-commerce Market Report 2024, Department of Consumer Affairs India, UK Citizens Advice Reports

India’s Legal Framework: The enactment of the Consumer Protection Act 2019 has fundamentally changed India’s approach to protecting consumers, particularly in digital commerce. While Section 2(37) defines “service” to cover e-commerce platforms, Section 2(7) defines “consumer” broadly to include online buyers. Importantly, Section 34 gives consumer commissions the authority to handle complaints about foreign vendors who target Indian customers, no matter where they are physically located. By creating accountability for the actions of third-party sellers and putting due diligence requirements on e-commerce businesses, the Consumer Protection (E-commerce) Rules 2020 reinforce this framework even more.

UK’s Legal Framework: UK consumers, especially those doing cross-border transactions, are fully protected by the Consumer Rights Act of 2015. Digital content rights are established by Sections 9–18, while unreasonable conditions and consumer contracts are governed by Sections 28–57. The Distance Selling Regulations mandate 14-day cooling-off periods for online purchases made across international borders. The recently passed Digital Markets, Competition and Consumers Act 2024 enhances consumer protection by concentrating on subscription traps, hidden fees, and false reviews, while also expanding the CMA’s enforcement powers.

Brexit’s Impact: Brexit has brought about major changes to the legal environment for consumers in the United Kingdom. UK consumers are no longer subject to EU consumer protection laws, nor are they eligible for the EU’s Online Dispute Resolution process. The disruption of cross-border enforcement procedures that depended on EU frameworks has resulted in enforcement gaps that disproportionately impact disputes with lower values.

Case Laws

Amazon Seller Services Private Limited v Gopal Krishan (2017) – NCDRC

In this historic case, the NCDRC ruled that an e-commerce platform cannot avoid culpability by arguing that it is only a facilitator if products bought through online portals are discovered to be defective. According to the Commission, the online portal is responsible for fixing issues that are discovered and reported to the platform right away. This ruling set a major precedent for platform liability in India by concluding that e-commerce businesses that provide integrated services, such as payment processing, delivery coordination, and customer support, share liability with sellers for defects in their products and services.

Chandra Prakash Mishra v. Flipkart India Private Limited (2022) – Supreme Court of India

The Supreme Court examined jurisdictional issues about e-commerce platforms and consumer protection in this case. Regardless of the platform’s actual location, the Court upheld the idea that Indian consumer forums have territorial jurisdiction over platforms that cater to Indian customers. The broad scope of safeguarding customer principles in digital commerce was made clear by this ruling, which also established that platforms that target Indian consumers with localised services, support for vernacular languages, and payment methods tailored to India are subject to Indian consumer protection laws.

Lifestyle Equities CV v. Amazon UK Services Ltd (2024) – UK Supreme Court

The UK Supreme Court ruled unanimously in this landmark case involving cross-border commerce that Amazon’s US website was directed towards UK consumers, subject to UK trademark laws and jurisdiction. The Court determined that foreign platforms cannot claim protection from UK consumer protection legislation when they deliberately provide UK-specific delivery alternatives, currency conversion, and targeted advertising to UK consumers. This ruling has significant consequences for consumer protection in cross-border e-commerce since it establishes that territorial targeting imposes legal duties independent of the platform’s home jurisdiction.

Competition and Markets Authority v. Amazon UK Services (2024) – UK Regulatory Enforcement

The CMA authorised Amazon’s pledge to resolve competition issues with the ‘Buy Box’ feature’s selection process and the usage of third-party seller data. The manner in which the UK regulates foreign platforms that operate in British markets is demonstrated by this enforcement action. The lawsuit created guidelines for fair consumer treatment and openness in platform operations, which are especially important for international transactions where knowledge gaps may harm consumers.

Various Consumer Forum Decisions Against Flipkart (2023-2024) – DCDRC

E-commerce platforms have been repeatedly held accountable by several district consumer forums in India for breaking disclosure laws and not offering sufficient consumer protection in cross-border transactions. Notably, the Berhampur District Commission compensated a customer Rs. 20,000 for Flipkart’s breach of e-commerce disclosure regulations. Together, these cases demonstrate that platforms handling complaints from international customers must adhere to clear disclosure policies and cannot conceal themselves behind confusing terms of service.

Conclusion

The comparative study shows both jurisdictions’ efforts to cross-border consumer protection to have important advantages and disadvantages. With the Consumer Protection Act of 2019 offering strong cross-border enforcement procedures, India’s framework tends to be more expansive in establishing jurisdiction over foreign platforms. The NCDRC’s likelihood to exercise extraterritorial jurisdiction in conjunction with the three-tier redressal structure fosters a consumer-friendly atmosphere for cross-border disputes.

The UK’s strategy places a strong emphasis on industry self-regulation and regulatory compliance, with extensive domestic protection offered by the forthcoming Digital Markets, Competition and Consumers Act 2024 and the Consumer Rights Act 2015. However, enforcement gaps in cross-border situations have been brought about by post-Brexit issues, especially when it comes to conflicts involving EU-based vendors.

Significant results show that improved bilateral collaboration mechanisms would be advantageous for both jurisdictions. Standardised refund procedures, expedited dispute resolution processes, and mutual recognition agreements for consumer protection orders might all greatly enhance customer results. Additionally, the practical difficulties that consumers encounter while seeking redress would be addressed by the creation of digital platforms for the filing and resolution of cross-border complaints.

According to the analysis, future legal reforms must concentrate on developing smooth cross-border consumer protection systems that strike a compromise between the rights of consumers and business realities. This calls for technology advancements that facilitate effective dispute resolution across countries in addition to legal uniformity. Both nations should think about embracing global norms for protecting consumers in e-commerce while preserving their unique legal systems.

FAQs

Can Indian customers sue UK-based online merchants in Indian courts?

Yes, regardless of their physical location, foreign vendors who target Indian consumers are subject to the jurisdiction of Indian consumer forums under the Consumer Protection Act of 2019. The crucial issue is whether the platform actively provides tailored services to Indian consumers.

What options are available to UK customers who purchase from Indian e-commerce sites?

Under the Consumer Rights Act of 2015, UK consumers are entitled to compensation, refunds, and replacements. They can use alternative dispute resolution procedures or UK courts, although it might be difficult to enforce laws against Indian sites after Brexit.

What is the process for handling payment disputes in international e-commerce transactions?

The rules of the consumer’s home country, the FCA in the UK and the RBI in India, control payment disputes. Primary protection is offered by chargeback procedures offered by credit card issuers and payment processors, which are frequently more successful than court actions for lower amounts.

What follows if a foreign vendor declines to address customer compliants?

Mechanisms for serving notice by other channels, such as email and website publishing, are available in both jurisdictions. Ex-parte orders against unresponsive foreign vendors can be issued by consumer forums, but the implementation is still difficult.

Do India and the UK have any bilateral consumer protection agreements?

protection agreements?
Although there isn’t a particular treaty on consumer protection, provisions for regulatory cooperation in digital commerce and consumer protection are included in the ongoing India-UK Trade and Investment Partnership discussions. Additionally, improved collaboration with foreign authorities is made possible by the UK’s Digital Markets, Competition and Consumers Act 2024.

What impact has Brexit had on India-UK cross-border consumer protection?

The Online Dispute Resolution platform and other EU consumer protection tools are no longer available to the UK as a result of Brexit. Bilateral cooperation between India and the UK is now more crucial than ever because of the enforcement gaps this has created, especially for lower-value disputes.

How can customers safeguard themselves when purchasing internationally?

Customers need to keep thorough transaction records, utilise safe payment methods with chargeback protection, confirm the seller’s credentials, and be aware of their rights under national consumer protection legislation. Before making purchases, they should also be informed about the relevant dispute resolution procedures and return policies.

Sources