SYNOPSIS

In the digital world of 21st century, computer, internet and Communication Technologies
have changed the life style. Today we have new terminologies like cyber world, e-commerce,
and etc. apart from positive side of e-revolution. Further, in 1990s Business people were
aware of increasing use of ICTs as it was easier, faster and cheaper to store, transact and
communicate electronic information but were reluctant to interact electronically because
there was no legal protection under existing laws. Accordingly, a new Branch of
jurisprudence known as Cyber Law or Cyber Space Law or Information Technology Law or
Internet Law, emerged to create order in cyber space. For the first time, a Model Law on E-
commerce was adopted in 1996 by United Nations Commission on International Trade and
Law (UNCITRAL) which was subsequently adopted by General Assembly of United
Nations. Significantly, main objective of law was to have uniformity at international level
regarding law relating to e-commerce and to provide equal treatment to paper-based and
electronic information. India was a signatory to this Model law and hence, enacted the
Information Technology Act, 2000. To keep pace with technology, the Model law on E-
Signature (MLES), 2001 was adopted by United Nations Commission on International Trade
and Law (UNCITRAL). Accordingly, India enacted the Information Technology
(Amendment) Act, 2008.1
Times have changed. People don't even need to go out anymore in order to buy things they
require. People recall the time they were young and wished for a more comfortable and easy
shopping alternative to buy what they needed much faster and in a manner to avoid the
crowded stores and the irritating saleswoman with their ace attitude. A click of your mouse
can bring you anything you like (if you pay for it off-course). Prices are even more
convenient online. People often find in this way cheaper products and the fact that they can
choose from a large variety of products is also a big benefit. It's all available at the tip of a
finger in their smartphones or computers, such is the magic of e-commerce. It has completely
revolutionised the Indian market. E-commerce refers to the practise of buying or selling of
goods and services, transfer of funds etc. online, i.e. through an Internet connection. The
convenience of the customers has been given the highest priority. It effectively saves time
and effort, gives us a plethora of options which would otherwise be impossible in physical
markets or stores, brings everything into 1 platform effectively making the process easy along
with the bonus of exceptionally affordable prices and delivery to our very doorstep.
Today e-commerce has become an integral part of everyday life. Accessibility to e-commerce
platforms is not a privilege but rather a necessity for most people, particularly in the urban
areas. Mail order or catalogue shopping has been in existence in the United States since 1980.
This was the predecessor of online commerce, which started in India post 2000. Today the
number of internet users in the world is close to 3 billion. Out of this, India has a total of
259.14 Million internet and broadband subscribers. This penetration of internet coupled with
the increasing confidence of the internet users to purchase online, has led to an enormous
growth in the e-commerce space, with an increasing number of customers registering on e-
commerce websites and purchasing products through the use of mobile phones. It is not
surprising, therefore, that India is in a prime position for the growth and development of the
e-commerce sector.2

1
Dr. Vivek Kumar, ‘study of E-Commerce and its legal framework: With special reference to India’ (2017) 3(3)
IJL < http://www.lawjournals.org/download/124/3-3-29-194.pdf> accessed 28 October 2018
2
Available at < http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/E-
Commerce_in_India.pdf> accessed 28 October 2018
According to a report, social networks play an important role in driving consumers online.
According to latest survey, the statistic shows the leading countries ranked according to
their number of Facebook users as of October 2018.India occupied the first place with 294
million users, ahead of second-ranked United States with 204 million Facebook users.3
However, it should be kept in mind that there still exists a form of ‘digital divide’ in India
where the benefits of internet have not fully percolated to non-urban areas. In this scenario,
mobile connections would play a very important role. Million wireless subscribers. Mobile
phones have been and will be a key tool in helping users connects in a market where overall
internet penetration may be low. The Indian Government has approved projects for providing
broadband connectivity to the local and village level government bodies (i.e. the Gram
Panchayats). The Government’s plan is to enable broadband connectivity at the rural levels.
This is further likely to boost e-commerce in India.
E-commerce brings forth a tougher business competition, leads to creation of new
marketplaces, faster transactions, and rapid growth in technologies. E-commerce can be
generally understood as a system or a method of conducting business through electronic
media rather than through conventional physical means.
E-commerce is defined as, “the use of electronic transmission medium to engage in
exchange, including buying and selling of products and services requiring transportation,
either physically or digitally, from location to location.”4
E-commerce has received huge popularity because of the automation technique used by it.
Due to ease in transactions, the number of e-consumers is growing at high rate and within a
very short period it will defeat physical consumer.4
Today, e-commerce is affecting business. Electronic business not only exchanges information
between buyers and sellers of goods, but also provides support and services to consumers.
More consumer demands appear on the Internet than any other mediums today. In fact e-
commerce has radically changed the travel industry to the extent that making travel plans is
just a click away as is evident from the increasing number of users of IRCTC i.e. the website
for booking tickets for Indian Railways. Even though the surge in the use of e-commerce was
primarily with respect to booking tickets online, now, even related activities such as hotel
accommodation and car rental are also catching on. It demonstrates that the internet has a
huge potential to grab many customers in a short amount of time, which in turn can become a
target market for growing firms. Internet has changed the economy so much that most of the
business activities today are carried out online.
Electronic commerce or ecommerce is a term for any type of business, or commercial
transaction that involves the transfer of information across the Internet. The concept and
implementation of e-commerce came to the fore in 1999 when the OECD {organization
adopted the first International Instrument for Consumer Protection for economic cooperation
and development} Council in the context of electronic commerce. After an initial reviewing

3
‘Leading countries based on number of Facebook users as of October 2018 (in millions),’
<http://www.statista.com/statistics/268136/top-15-countries-based-on-number-of-facebook-users/> accessed 4
November 2018

4
Dr. Shashi Nath Mandal, ‘E-Consumers' Protection in India’ (2016) 16(5) Global Journal of Management and
Business Research: E-Marketing
<https://journalofbusiness.org/index.php/GJMBR/article/download/2142/2044/>accessed on 4 November
2018
of their policies, recommendations were noted as to how the idea of e-commerce could be
embraced. The term ‘electronic commerce’ or ‘e-commerce’ simply refers to business
transacted by electronic means which includes business to business and business to consumer
transactions. The term is a broad concept that encompasses agreements concluded
electronically through the exchange of e-mail over websites and the transfer of money by
electronic means Despite the fact that companies have exchanged business data for many
years by using different- communication networks, the emergence of e-commerce has
changed the method and nature of that exchange. As mentioned, e-commerce is most
frequently associated with the use of the internet, which allows one to advertise goods and
services make purchases and arrange sales and payment. During its rapid growth the internet
has made e-commerce open to every person and every company around the world. It provides
business with the ability to reach customers without the need to have a Physical existence.
(i.e. shop) in different jurisdictions.5
Technology develops faster than law and it will continue to be one step ahead of law. Thus
electronic transactions in the present set up are full of insecurities and uncertainties because
of absence of proper legal mechanisms. To cope up with the technological advancement we
have to take the help of technology; as Charles Clark once remarked ‘The answer to the
machine is in the machine’4 Indeed, the perfect reply to the technological abuses is the
application of technological innovation. Since existing consumer laws of India are unable to
protect e-consumers’ rights properly, the consumers have to be more cautious about the use
of e-market.
Factors like safety and security of online money transaction being the vital problem along
with others have curbed the smooth expansion of the online industry in the country. The
recent Government Initiatives such as digital India make in India, start-up India, skill India,
and innovation fund and e-market platform for agro-commodities are positive steps in this
direction.
E-Commerce has its roots from foreign jurisdictions. The concept has evolved in developed
nations like United States. These jurisdictions have appropriate laws and adequate
infrastructure to cater the needs of online stakeholders. This has helped these stakeholders in
not only complying with the laws of these countries but also in contributing towards the GDP
of these nations. E-Commerce in India is a totally different class. It has all the advantages of
profit making and commercial viability but is neither regulated by any dedicated e-commerce
law, although we have IT Act, 2000, which happens to be the first Cyber Law in India. It is
based on UNCITRAL (United Nations Commission on International Trade Law) model law.
It provides treatment for users of electronic communications & paper based communication.
There are many other legal avenues like foreign direct investment (FDI), foreign exchange
management act (FEMA), national taxation laws, cyber security due diligence, ecommerce
due diligence, etc are openly ignored in India. In some instance, enforcement directorate (ED)
has also initiated investigation against big online retail operators like Myntra, Flipkart and
many more e-commerce websites operating in India. Many stakeholders have also protested
against the quality, purity, potency, price, unfair trade practices and predatory pricing tactics
of Indian e-commerce websites. However, the Consumer Protection Act gives consumer the
right to be protected against unscrupulous exploitation of consumers.6

5
Abdulhadi M. Alghamdi , The Law of E-Commerce: E-Contracts, E-Business,(Author House,2011)

6
Saher Owais Talib, ‘E-commerce laws and regulations in India’ (2016) 3(4) IJMRD
<http://www.allsubjectjournal.com/download/2094/3-4-30.pdf> accessed 4 November 2018
The common complaints received related to e-commerce are defective or wrong product
delivery, refusal to replace wrong product delivered, refusal or delay in refunding of money
transferred for online purchase, unreasonable delay in delivery of products purchased online,
issues regarding guarantee and warranty of products purchased online, risky exposure of
sensitive personal information shared for online transactions. Such issues get difficult to
tackle in the absence of any concrete legal remedy in the event of disputes which gives rise to
the utmost need of consumer protection laws.
The jurisdiction of a nation only extends to individuals who are within the country or to the
transactions and events that occur within the natural borders of the nation. However, in e-
commerce transactions, if a business derives customs from a particular country as a result of
their website, it may be required to defend any litigation that may result in that country. There
are certain provisions in the laws in India which provide for the long term jurisdictions.
I.IT Act
IT Act Section 1(2) of the IT Act read along with Section 75 of the IT Act provides that
￭ the Act shall extend to the whole of India and, save as otherwise provided under the Act, it
shall apply also to any or contravention thereunder committed outside India by any person
and
￭ the Act shall apply to any offence or contravention committed outside India by any person
if the act or conduct constituting the offence or contravention involves a computer, computer
system or computer network located in India.7
II. Indian Penal Code, 1869
Section 3 of the IPC provides that any person who is liable, by any Indian law, to be tried for
an offence committed beyond India shall be dealt with according to the provisions of the IPC
for any act committed beyond India in the same manner as if such act had been committed
within India.8
There does not seem too much jurisprudence in India on the issue of jurisdiction in cases of
e-commerce.
III. International Jurisprudence
The US courts have developed the “minimum contacts” theory whereby the courts may
exercise personal jurisdiction over persons who have sufficient minimum contacts with the
forum state. These "minimum contacts" may consist of physical presence, financial gain,
stream of commerce, and election of the appropriate court via contract.
SECURITY ISSUES IN E-COMMERCE
Privacy and Data Protection: Every e-commerce website is to maintain the privacy of its
users. Use of innovative technologies and lack of secure systems makes it easy to obtain
personal and confidential information about individuals and organizations. Privacy concerns
have also been raised regarding the Internet Corporation for Assigned Names and Numbers,
which is a publicly searchable resource used to determine the identity of domain name
registrants.

7
The Information Technology Act, 2000
8
Indian Penal Code, 1869
Some of the important privacy concerns over the Internet include: a) Dissemination of
sensitive and confidential medical, financial and personal records of individuals and
organizations; b) sending spam (unsolicited) e-mails; c) tracking activities of consumers by
using web cookies; and d) Unreasonable check and scrutiny on an employee’s activities,
including their email correspondence. 9
The IT Act deals with the concept of violation of privacy in a limited sense; it provides that
the privacy of a person is deemed to be violated where images of her private body areas are
captured, published or transmitted without her consent in circumstances where she would
have had a reasonable expectation of privacy 29 and prescribes a punishment of
imprisonment of up to 3 years and/or fine of up to INR 2 lakhs.
Security Systems: Security over the Internet is of vital importance to promote e-commerce.
Companies that keep sensitive information on their websites must ensure that they have
adequate security measures to safeguard their websites from any unauthorized intrusion. A
company could face security threats externally as well as internally. Externally, the company
could face problems from hackers, viruses and Trojan horses. Internally, the company must
ensure security against its technical staff and employees. Security can be maintained by using
various security tools such as encryption, firewalls, access codes / passwords, virus scans and
biometrics.
Online Identity: Transactions on the Internet, particularly consumer-related transactions,
often occur between parties who have no pre-existing relationship, which may raise concerns
of the person’s identity with respect to issues of the person’s capacity, authority and
legitimacy to enter the contract. Digital signatures, is one of the methods used to determine
the identity of the person. The regulatory framework with respect to digital signatures is
governed by the provisions of the IT Act. Different authentication technologies have evolved
over a period of time to ensure the identity of the parties entering into online transactions.
However, there are some issues that need to be considered by companies
In particular the IT Act provides that an electronic signature shall be deemed to be a secure
electronic signature if:
i. The signature creation data, at the time of affixing the signature, was under the exclusive
control of the signatory and no other party; and
ii. The signature creation data was stored and affixed in such exclusive manner as may be
prescribed.
E-COMMERCE AND CONSUMER PROTECTION
In India, the Consumer Protection Act 1986 governs the relations between consumers and the
provider of services/goods. It should be noted here that no specific act regulates the online
transactions. The consumer protection act has been carefully designed to muster the
confidence of consumers in law and liability under this act thus arises when there is a
deficiency in services or defect in goods or sometimes as the case maybe, unfair trade
practices. The Consumer Protection Act specifically excludes from its ambit any service that
is free of charge. Depending upon who is selling the actual goods to the consumers, liability
triggers. Also, distribution of goods comes within the purview of consumer protection act.10

9
Chitrangda, ‘E-commerce: Business and Legal Ethics (2014) 2(2) IJSRM
<http://ijsrm.in/index.php/ijsrm/article/download/67/51/> accessed 4 November 2018
10
Consumer Protection Act,1986
Some of the various protections under the consumer protection act are: a)removal of defects;
b)replacement of goods; c)return of price in case of discrepancy; d)discontinue any form of
restrictive trade practice; e)Pay compensation may be awarded.2
Support of the OECD Guidelines for Consumer Protection in the Context of Electronic
Commerce
Regulation of this area in the U.S. should be governed by the OCED Guidelines on Consumer
Protection which were released in 1999. These Guidelines are predicated on the basis that
consumers should not be offered any less protection when participating in electronic
commerce than they are in other forms of commerce. The main protections which the
Guidelines propose include;
# Fair Business, Advertising and Marketing Practices
# Sufficient disclosure of relevant information
# A clear and unambiguous confirmation process
# Proper means of redress in the case of cross border disputes and clarification of applicable
jurisdiction.
# A secure method of payment, minimizing the risk of financial loss.
# A reliable system of international Alternative Dispute Resolution to provide a workable
alternative to litigation, which may be costly and disproportionate in the case of long distance
transactions.11
International Chamber of Commerce: It was in 1996, that the organization released
‘guidelines on advertising and marketing on the internet’. The guidelines issued by the ICC
were meant to be applied to all promotional activities like marketing and advertising on the
internet. They set standards of ethical conduct to be observed by all involved in the above
activities. Its specific objectives with respect to consumer protection in the sphere of e-
commerce can be checked out at a glance:
 Improve and instill the public confidence in advertising and marketing via the new
system.
 To safeguard optimal freedom of expression for advertisers and markers.
 To minimize the need for governmental legislation or regulation.
 Meet the consumer privacy expectation.
International Consumer Protection and Enforcement Network: The ICPEAN aims to
preserve and protect the interests of the consumers all over the world. It shares information
about activities taking place across borders which may be of use to the consumers and
promote their welfare to encourage global cooperation among law enforcement agencies.
The Okinawa Charter on Global information society addressed topical issues at length like,
making use of digital opportunities, bridging the digital divide, promoting global
participation. To achieve its objectives, it has set forth policies and guidelines, thus increasing
access and participation in global e-commerce networks.
Following are some general principles that have been recommended and accepted
universally, so as to protect the consumers in e-commerce:

11
Available at
<http://www.oecd.org/sti/consumer/oecdguidelinesforconsumerprotectioninthecontextofelectroniccommerc
e1999.htm> accessed 4 November 2018
  Consumers who participate in e-commerce should be provided with transparent and
effective consumer protection that is affordable for which government and
stakeholders might work together.
 Businesses should in no circumstance engage in making representation or practice
anything that’s misleading or works to the right of the consumers.
 Businesses should never conceal any term or condition that might affect the
consumer’s decision regarding the transaction
 If a contract’s term stipulates the monetary damage to be furnished in the case of
consumer’s violation of the contract, it should be ensured that such compensation is in
proportion to the damage caused.
 Businesses should not restrict a consumer’s ability to make negative reviews, dispute
charges or file complaints with government and other agencies.
 Advertising and marketing should be clearly identifiable as such
 Advertised price must not hide the total cost of a good or a service
 The payment made for the confirmation of a transaction must be clearly stated and not
be ambiguous under any circumstances. Transactions in e-commerce can only process
with the informed consent of the consumers.
 Businesses should enable the consumers to maintain a record of such transaction for
future use as evidence or other things, as the case maybe
 Businesses must manage the digital security risk and implement security measures for
reducing or mitigating adverse effects relating to e-commerce.
Precautions to be taken by consumers
 In addition to the laws protecting consumers, consumers themselves ought to be
careful and take some precautionary measures while making transactions and
purchases online. A few examples are as follows:
 Be well informed about the dealer before making an online purchase;
 Read up on the privacy policy of the online portal or the dealer;
 Never make purchases from unknown online retailers;
 Read reviews before making a purchase;
 Monitor your bank account from where you make the online transactions regularly.
Prefer using credit cards for online purchases instead of debit cards.
 E-mail addresses can be set up fraudulently, and so sending users details encrypted by
e-mail are still no guarantee of security. Sending details via a web site form provides
some extra security because of the more exacting requirements for registration of
Internet sites.
 Keep all the details of purchases by printing the invoice. If user needs to complain at a
later date, these pages will provide the information needed.
 Accounts should not be kept open after transaction for a long time as this gives hackers
an opportunity to hack the password or relevant information from users PC or destroy
user’s important information.
 Never purchase things from a new website or portal when there is reasonable chances
of suspicion.
 Whenever possible customers should always opt for Cash-on-Delivery option rather
than using credit cards or debit cards. This helps in protecting them against fraud.

CONCLUSION-Technology is leaping with unmatched speed, today. The

governments as well as inter-governmental organizations have come up with various
frameworks to deal with e-commerce and e-consumers. Protecting consumer rights is of
the utmost importance as they are the backbone of any economy and everyone is a
consumer in one way or the other. With new advancements and technology, the laws need
to be up to date to ensure smooth functioning of business and a stable economy The
Consumer Protection Act, 1986 specifically excludes from its ambit the rendering of any
service that is free of charge. If an online platform is not charging the users, the CPA may
not apply. Thus India is in need of consolidating the law to deal with all above-mentioned
situations so that the electronic consumers’ right can be protected properly.