Centre for Internet and Society

Consumer Privacy

praskrishna — 2012-09-13T09:21:26Z

This chapter will examine the present legal state of consumer privacy in India and seek to understand the gap between policy and implementation of policy. In doing so, it will look at what are the existing avenues for protection of consumer privacy in India, how is the definition of consumer privacy evolving through case law and public opinion, and what are the current challenges to consumer privacy in India. Traditionally speaking, and according to the Consumer Protection Act, 1986, in India, a consumer is a broad label for any person who buys goods or services with the intent of using them for non-commercial purposes. In the typical sense, when people think of themselves as being consumers, they think about transactions with a vendor through a physical exchange of money in a store or through an online exchange for a product or service. Certain services that consumers use put an extraordinary amount of sensitive personal information into the hands of vendors.

For more details visit https://cis-india.org/internet-governance/consumer-privacy.pdf

Comments on proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020

Vipul Kharbanda, Rajat Misra, Arindrajit Basu and Aman Nair — 2021-07-27T14:45:07Z

The Consumer Protection (E-commerce) Rules, 2020 were first introduced in an attempt to ensure that consumers were granted adequate protections and to prevent the adoption of unfair trade practices by E-commerce entities. The amendments have proposed several rules which will protect the consumer with a restriction on misleading advertisements and appointment of grievance officers based in India. However, while on this path, the proposed rules have created hurdles in the operations of e-commerce, reducing the ease of business and increasing the costs of operations especially for smaller players; which could eventually pass on to the consumers.

In our submission to the Ministry of Consumer Affairs, we focussed our analysis on eight points: Definitions and Registration, Compliance, Data Protection and Surveillance, Flash Sales, Unfair Trade Practices, Jurisdictional Issues with Competition Law, Compliance with International Trade Law and Liabilities of Marketplace E-commerce Entities.

A snapshot of our recommendations and analysis is listed out below. To read our full submission, please click here.

Definitions and Registrations

The registration of entities with the DPIIT must be made as smooth as possible especially considering the wide definition of E-commerce entities in the rules, which may include smaller businesses as well. In particular, we suggested doing away with physical office visits.

Compliance

As a general observation, compliance obligations should be differentiated based on the size of the entity and the volume of transactions rather than adopting a ‘one size fits all’ approach which may harm smaller businesses, especially those that are just starting up. Before these rules come into force, further consultations with small and medium-sized business enterprises would be vital in ensuring that the regulation is in line with their needs and does not hamper their growth. Excessive compliance requirements may end up playing into the hands of the largest players as they would have larger financial coffers and institutional mechanisms to comply with these obligations.

There is some confusion in the law as to whether the Chief Compliance officer mentioned in the amended rules is the same as the “nodal person of contact or an alternate senior designated functionary who is resident of India” under Rule 5(1).

The safe harbour should therefore refer to due diligence by the CCO and not the e-commerce entity itself. The requirement for the compliance officer to be an Indian citizen who is a resident and a senior officer or managerial employee may place an undue burden on small E-commerce players not located in India.

Data Protection and Surveillance

In the absence of a Personal Data protection bill these rules do not adequately protect consumers’ personal data and reduce the powers given to the Central Government to access data or conduct surveillance

Flash Sales

Conventional flash sales should be defined. Clear distinction must be made between conventional flash sales and fraudulent flash sales. The definition should not be limited to interception of business “using technological means”, which limits the scope of the fraudulent flash sales. Further parameters must be provided for when a flash sale will be considered a fraudulent flash sale.

Unfair Trade Practices

The rules place restrictions on marketplace E-commerce entities from selling their own goods or services or from listing related enterprises as sellers on their platforms. No such restriction applies to brick and mortar stores, and this blanket ban must be rethought.

Jurisdictional Issues with Competition Law

This rule brings the issue of ‘abuse of dominant power’ under the fora of the Consumer Protection Authority or the Consumer Disputes Redressal Commissions. Overlapping jurisdiction of this nature could introduce regulatory delays into the dispute resolution process and can be a source of tension for the parties and regulatory authorities. The intention behind importing a competition law concept such as “abuse of dominant position” in the consumer protection regulations may be understandable, such a step might be effective in jurisdictions which have a common regulatory authority for both competition law as well as consumer protection issues, such as Australia, Finland, Ireland, Netherlands. However, in a country such as India which has completely separate regulatory mechanisms for competition and consumer law issues, such a provision may lead to logistical difficulties.

Compliance with International Trade Law

A robust framework on ranking with transparent disclosure of parameters for the same would also go a long way towards addressing concerns with discrimination and national treatment under WTO law. Further, the obligation to provide domestic alternatives should be clarified and amended to ensure that it does not cause uncertainty and open India up to a national treatment challenge at the WTO.

Liabilities of Marketplace E-commerce Entities

Fallback liability is an essential component of consumers’ protection in the E-commerce space. However, as currently envisioned there is a lack of clarity surrounding the extent to which fallback liability is applicable on E-commerce entities as well as exemptions to this liability. We have recommended alternate approaches adopted in other jurisdictions, which include

Liability through negligence
Liability as an exemption to safe harbour

For more details visit https://cis-india.org/internet-governance/blog/comments-on-proposed-amendments-to-the-consumer-protection-e-commerce-rules-2020

Civil Society Letter Against TRIPS-Plus IP Enforcement

pranesh — 2011-09-22T12:48:51Z

This open letter was sent to the president of Confederation of Indian Industry (CII) and high-level government officials on the eve of the Third International Conference on Counterfeiting & Piracy organized by CII. This conference aims to strengthen the enforcement of intellectual property rights and thus creating an imbalance in the protection that intellectual property offers to both those who own it as well as those who don't.

An Open Letter to the President of Confederation of Indian Industry (CII) on the Third International Conference on Counterfeiting & Piracy

To
Mr. Venu Srinivasan
The President
Confederation of Indian Industry (CII)
The Mantosh Sondhi Centre, 23,
Institutional Area, Lodi Road
New Delhi - 110 003

Dear Mr. Srinivasan,

We understand that Confederation of Indian Industry (CII) is hosting the Third International Conference on Counterfeiting and Piracy from 19-20th August 2009 in partnership with the Embassy of the United States and the Quality Brand Protection Committee (QBPC), China. As stated in the invitation letter the primary objectives of the conference are: 1) to initiate coordinated action for cross border enforcement; 2) to highlight the importance of protection of intellectual property rights (IPRs); 3) to combat the growing threat of piracy and counterfeiting; 4) to facilitate a global meeting of customs officials across the globe; 5) to recommend the creation and setting up of a governmental “National Brand Protection” group; 6) to serve as a forum to discuss legal guidelines related to the prosecution of IPR infringement and to eliminate ‘loopholes’ within the existing laws; and 7) to strengthen cooperation between enforcement agencies and chalk out strategies for enforcement agencies a industry action both at national & international level. We also understand that this international conference is part of CII Intellectual Property Division’s special initiative on enforcement of IPRs. As part of this special initiative CII aims at “engaging government to create conducive legislative measures, policy levels reform and impressing [upon them] to adopt stringent enforcement initiatives and exemplary punitive and monetary measures to further safeguard and secure the interest of industry”. CII also wants to “create a global partnership to synergise efforts of international community and to support and participate in India's efforts in combating counterfeiting both at domestic and international levels”. We, the undersigned, representing various civil society organizations in India, write this letter to express our strong reservation on the conference as well as on CII’s special initiative on IP enforcement. Without raising any question on CII’s right to organize events we would like to convey the following concerns with regard to the conference and CII’s initiative on IP enforcement.

Many of the above mentioned objectives of the conference and the special initiative are directed towards the enhancement of intellectual property (IP) standards like coordinated action on border measures, common guidelines for prosecution of IP infringement, exemplary punitive and monetary measures, etc. In other words, enhancement of IP standards means using more public money to protect private rights; very often protecting the monopoly over intangible property rights of multi-national corporations (MNCs).

As you may be aware, MNCs and their developed country hosts are currently engaged in the implementation of a multi-pronged strategy to enhance IP enforcement standards.[1] This is similar to the MNC’s initiatives in the mid 80s to enhance international IP protection, which resulted in the Agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS). Unlike the 80s, now MNCs and developed countries use multiple forums to pursue the objective of enhancement of IP enforcement standards. Some developed countries have unilaterally enhanced their IP enforcement strategy to force other countries, especially developing countries, to accept the same through various multilateral organizations, namely the World Customs Organization (WCO), World Health Organization (WHO), Universal Postal Union (UPU), Interpol, WIPO and WTO. Developed countries are also using Free Trade Agreements (FTAs), Bilateral Agreements on IP Enforcements as well as financing lobbyist studies, conferences and policy recommendations to impose higher IP enforcement standards. These efforts for the enhancement of IP enforcement standards are a matter of grave concern for the people of developing countries and their governments. By partnering with the US Embassy and Quality Brand Protection Committee of China (QBPC)[2] in the organization of this conference, CII is allowing itself to play in the hands of MNCs and some developed countries, whose interests do not match with that of India industries and that of the Indian people.

As you are aware, the Government of India is taking a very strong position in resisting enhancement of IP enforcement standards in all the multilateral forums. India along with like-minded developing countries successfully pushed back TRIPS-plus[3] IP enforcement agenda at WCO and WHO. India is also trying its level best to convince other developing countries the need to stick to TRIPS-compliant standards rather than adopting TRIPS-plus enforcement standards. In the wake of the controversial generic drug seizures by EU customs authorities, India has also raised the issue of TRIPS-plus IP enforcement standards contained in the EU IP Enforcement Directive at least two times at the TRIPS Council.[4] The Indian political leadership has unequivocally raised its concern over the enhancement of IP enforcement standards at other forums also.[5] In adopting this stance, the Government of India has cited public interest as well as the operating freedom of Indian industry as its justifications.[6] By partnering at this vital stage with an MNC lobby group and a heeding to developed country governments, CII is not acting in furtherance of the legitimate public interests of Indian domestic industry and the Indian people.

It is a well-evidenced fact that TRIPS-plus enforcement standards adversely impact not only legitimate trade between nations (as shown by the EU seizures) but also the day-to-day life of millions of people especially in India and other developing countries.[7] Unfounded IP enforcement measures would adversely impact access to life saving medicines and educational materials. Thus the IP enforcement measures also have the potential to deny right to development to people in the global South. Hence an organization like CII should not view IP as only a business tool but should look at the larger scheme of things especially in the social and economic realities of India. In fact, by promoting enhancement of IP enforcement standards CII is advocating a policy, which would violate the right to health, the right to knowledge, as also the right to development.

We would also like to point out that Indian pharmaceutical industry is one of the victims of TRIPS-plus IP enforcement standards. In 2008 alone, 17 consignments[8] were seized in transit at Europe using the EU Directive on IP Enforcement, which allows seizure of goods in transit.[9] These consignments were being exported from developing countries (such as India and Brazil) to other developing countries, and the contents of the consignments are perfectly legal in both the exporting as well as the importing nations. These highly questionable seizures resulted in the crisis of health programmes as it resulted in delays in and prohibitive costs of access to life-saving medicines in developing countries of Africa and Latin America. CII can barely claim to be representative of the interests of Indian industry if it ignores such episodes and partners with self-promoting MNCs and developed countries’ governments to advocate for the enhancement of IP enforcement standards.

In the light of above-mentioned issues, we request you to consider the following:

Rejecting the TRIPS-plus enforcement agenda in toto. We demand CII, Federation of Indian Chambers of Commerce and Industry (FICCI), Associated Chambers of Commerce and Industry(ASSOCHAM) and other Indian business associations to reject any and all attempts of bringing in a TRIPS-plus enforcement agenda in India, in the interests of Indian industry and the Indian people.
Completely disengaging from any collaborative efforts with foreign institutions to further TRIPS-plus standards of IP protection in India and also abstaining from any engagements on the anti-counterfeiting efforts with foreign agencies. CII should attempt to engage with domestic institutions and build national consensus before engaging with foreign institutions with the claim of representatives of Indian industry.
Taking necessary proactive steps to safeguard the interests of access to medicine and access to knowledge along with interest of the Indian domestic industry.
Participating in a more creative discussion on IP and development rather than simply accepting the simplistic and largely discredited view that stronger IP regime leads to more innovation and is a necessary condition for socio-economic development.

CC:
Shri Anjan Das
Senior Director & Head
Technology, Innovation, IPR & Life Sciences
Confederation of Indian Industry (CII)
Plot No. 249-F, Sector-18; Udyog Vihar, Phase-IV,
Gurgaon-122015, Haryana

Shri. P. Chidambaram
Minister
Ministry of Home Affairs
Government of India
North Block, Central Secretariat
New Delhi 110001

Shri G. K. Pillai
Secretary Justice
Department of Justice
Ministry of Home Affairs
Government of India
North Block, Central Secretariat
New Delhi 110001

Shri Naresh Dayal,
Secretary, Dept. of Health and Family Welfare
Ministry of Health and Family Welfare
Government of India
149-A, Nirman Bhawan, New Delhi – 110 011

Shri Ajay Shankar
Secretary
Department Of Industrial Policy & Promotion
Ministry of Commerce and Industry
Room 153, Udyog Bhavan,
New Delhi – 110 011

Signatories to this letter

Centre for Trade and Development (Centad), New Delhi
Centre for Internet and Society, Bangalore
National Working Group on Patent Laws, New Delhi
Lawyers Collective (HIV/AIDS Unit)
All India Drug Action Network (AIDAN)
International Treatment Preparedness Coalition (ITPC), India
Consumers Association of India, Chennai
IndoJuris Law Offices, Chennai
All Indian People’s Science Network, New Delhi
Delhi Science Forum
Alternative Law Forum, Bangalore
Knowledge Commons
Moving Republic
IT for Change
Centre for Health and Social Justice(CHSJ), New Delhi
Navdanya, New Delhi
Support for Advocacy and Training to Health Initiatives (SATHI)
Centre for Enquiry Into Health and Allied Themes (CEHAT)
Initiative for Health Equity & Society
International Peoples Health Council (South Asia)
Drug Action Forum – Dharwad, Karnataka
Dr. Mira Shiva, New Delhi
Tina Kuriakose, PhD Scholar, Jawaharlal Nehru University, New Delhi
Dr Gopal Dabade, Dharwad
Dinesh Abrol, Scientist NISTADS, CSIR, New Delhi
Madhavi Rahirkar, Lawyer/Consultant, Pune
Gautam John, Bangalore
Achal Prabhala, Bangalore

Endnotes

[1] See Susan K Sell, The Global IP Upward Ratchet, Anti-counterfeiting and Piracy Enforcement Efforts: The State of Play.
[2] QBPC barely qualifies as a representative of Chinese interest, as it comprises more than 180 multinational member companies.
[3] ‘TRIPS-plus’ refers to any protection of IPRs that surpasses the standards and requirements spelt out in WTO-TRIPS provisions.
[4] See Jonathan Lyn, India Brazil raise EU drug Seizures issue at WTO, available at http://www.livemint.com/2009/02/04232721/India-Brazil-raise-EU-drug-se.html
[5] Indian Minister of State for External Affairs Broaches Seizures of Generics at ECOSOC, available at http://www.keionline.org/blogs/2009/07/08/india-ecosoc-seizures/#more-2404
[6] Indian Commerce Secretary’s Speech to the African Community Ambassadors. available at http://www.centad.org/focus_77.asp.
[7] For two very recent examples, see Intellectual Property Enforcement: International Perspectives, Xuan Li & Carlos Correa (eds.) (2009); Anand Grover, Report of the Special Rapporteur on the Right of Everyone to the Enjoyment of the Highest Attainable Standard of Physical and Mental Health, A/HRC/11/12 (2009).
[8] Jyoti Datta, 16 out of 17 drug consignment seizures in the Dutch were from India available at http://www.thehindubusinessline.com/2009/06/08/stories/2009060851700300.htm
[9] The EC Regulation No 1383/2003 allows for seizure of goods in transit.

For more details visit https://cis-india.org/a2k/blogs/civil-society-letter-against-trips-plus-ip-enforcement

At the end of the niche optical pirate

siddharth — 2011-08-04T04:44:58Z

In this blog post, Siddharth Chaddha goes enquiring into the modus operandi of a video pirate / film lover / businessman in Bangalore's famed National Market.

Getting to the National Market

Wading through Majestic Bus Stand, Flea Markets, Private Bus Stops and vehicles going around in circles, you could almost miss this board outside one of the shopping plazas. NATIONAL MARKET, the famed "pirate market" at the heart of the city. Most of the business here is illegal and the local police raid the thirty odd shops selling goods, which within the purview of any multilateral agreement under WIPO or TRIPS regime would be an infringement of copyright, at least once a month. The shops run shutter to shutter, each one five by four feet. Crowded with sellers and customers, all pirate markets typically smell the same. Pirated DVDs, DVD players, Chinese mobile phones and PDAs, even VHS players of the yore, smuggled MP3 music systems, fake Ray-Bans and Police sunglasses, gaming consoles. You name it, and National Market has it.

Meet the Pirate

Tall and sporting a stubble, Sooraj (name changed) is a Malayali who has been in the trade for over 8 years. "Earlier, I used to have the best English Movie collection ever. But now, its all going away. Most people have shifted from DVD's to Digital Storage and Bit Torrents", says Sooraj. A family comes across the counter. A middle aged man accompanied by two women in a burqua, one of them carrying a young baby boy in their hand. "Tom and Jerry!", says the man and Sooraj's helper brings out a carton full of animated Hollywood films. Finding Nemo, The Lion King, Madagascar, its all there. "No Tom and Jerry. This doesn't have Tom and Jerry", growls the stout customer. Sooraj jumps into the action, hunts out a DVD from a stack and puts it on the table. "Tom and Jerry Tales - 13 episodes", reads the the outside with a classic Tom chasing Jerry picture on the cover. Satisfied, the family puts it aside and goes on to explore other popular cartoon series. In the end, the man calls for Maharathi, a recent Bollywood flick. He looks at the cover intriguingly and I decide to butt in, "Amazing movie. Just saw it last week. Great plot." The deal is seized and after a bout of bargaining over the price. As the family dissolves into the market, Sooraj turns back and says to me, "A lot of customers bargain. I get a headache. And my shop is the first one in the market, inside people operate on margins of 5-10 rupees. That just ruins everything for us. They don't think of the amount of the risk involved."

The Business of Piracy

Sooraj explains to me how Chennai is the biggest market of the South. "Chennai is a sea. You will get everything there. Once you take a dive in that ocean, it's all there." When I ask him of the chain of distribution, he says, "No one will say that I print the covers of fake DVDs or I copy prints. For me, I just call my distributor and everything comes from Chennai. I don't ask beyond that. The stock comes in the price range of 25-35-40 Rupees. Now, there is only one quality of stock. The market is dying. No one has good stock. Earlier, we used to sell DVDs for Rs.70-80. Now, there is no demand. Even the wholesale business is at a low.'' I ask him, "So what are you going to do, now that soon DVDs will be gone?" Sooraj is not flustered. "We will shut this and start a new business," he says. I quietly step back, as another customer comes asking for audio CDs. He doesn't deal in those.

Enforcement Threat

When the customer is gone, I ask him, "How often does the police raid this market?" He smiles and replies, "Not often anymore. The business is almost dead. But yes, they come sometimes. Then you are taken away and a case ensues." I decide to ask him candidly, "How many times have you been booked?" He smiles again. "5-7 times. I have a few cases pending, dates that I have to go and visit the court. They arrest you for a day but that's all they can do. After all this is not a big crime." He continues dealing with customers who have various demands for music and films. Some he sells to, he guides others to the inside shops. "I sell about a 1000 DVDs everyday. Earlier, the figure used to be much higher. Mostly English. Hindi, Tamil and Telugu too. No Kannada," he volunteers. I probe further, "Why no Kannada?" He says that that he supports protection for their own industry. "And the market price for Kannada films is appropriate. Some are Rupees 60, 90, 110. That's reasonable. We do not need to pirate it."

I ask him for Tamil titles. He asked if I wanted Ghajani. “I saw it when it released. Give me something that's worth watching.” He picks out two. Saroja and Subramaniya Puram. He doesn't make a profit in this deal but something tells me that he is happy to spread the love of good films. "Can I click a picture?" He refuses, saying it would not be a good idea. I shake his hand. Until next time.

For more details visit https://cis-india.org/a2k/blogs/at-the-end-of-the-niche-optical-pirate

Are Indian Consumer Laws Ready for the Digital Age?

vipul — 2013-08-08T11:52:40Z

The Economic and Social Council of the United Nations, recognizing the need for protection of the rights of consumers, drafted a set of model guidelines on consumer protection which were adopted by the General Assembly in 1985. The United Nations Guidelines for Consumer Protection (UNGCP) act as an international reference point of the consumer movement, however since it has been over a quarter of a century since they were first drafted, there is a strong argument for revising them to bring them in line with new developments in technology and business practices.

It is for this reason that that United Nations Conference on Trade and Development has undertaken a revision of the UNGCP. Consumers International, an international consumer rights organization has along with CIS and other groups been trying to represent the voice of consumers at the negotiations for this revision. As part of this effort, Consumers International has produced a book titled "Updating the UN Guidelines for Consumer Protection for Consumers in the Digital Age". This blog has been produced through a filteration of the essence of some of the arguments and issues addressed in that book.

In December 2012 there was a news report that pegged the market for online commerce in India at roughly USD 14 billion,[1] which is why some of the poster children of online retail in India are getting stratospheric valuations even though they are yet to show any major profits, case in point, Flipkart had a valuation of around USD 800 million[2] in 2012 and is looking for an IPO in around three to four years. Such huge numbers give a sneak peek into the size and scope of the Indian e-commerce marketplace which begs the question, if there are so many transactions occurring in the online marketplace and since a large number of those transactions are between retailers and domestic consumers, then are there any specific laws out there protecting the interests of consumers in the online world.

Apart from the Information Technology Act, 2000 and various circulars by the Reserve Bank of India regarding online banking and money transfer activities which are more generic in nature trying to secure the online space as a whole, there are no specific laws that seek to protect consumers in the online space. However, that does not necessarily mean that the consumers are left without any recourse and in this post we shall examine whether it is possible to use the Consumer Protection Act, 1986 to protect consumer rights in the online environment as well.

The Consumer Protection Act, 1986 (“COPRA”) was enacted with the purpose of empowering consumers to take on the might of large corporations and preventing unscrupulous businessmen from taking undue advantage of the weak position which consumers are inherently placed in under the archaic Indian judicial system. It set up special tribunals, simpler procedures and enacted special provisions to help consumers get a better bargaining position vis-à-vis manufacturers and retailers, etc. However, since this law was enacted more than a quarter of a century ago and it is not entirely geared towards protecting consumer rights in the digital era. However, that does not mean it is entirely toothless in the online environment although it certainly needs some major provisions to come to grasp with the special circumstances and practices of the online marketplace, as the rest of the discussion will demonstrate.

For any transaction to come under the purview of COPRA, it should have the following three essential requirements:

There should be a ‘good’ or ‘service’ sold or provided to a consumer;
Such good or service must be ‘sold’ i.e. there must be a ‘sale’;
There should be a ‘defect’ in the good or ‘deficiency’ in the service;

We will now examine different types of e-commerce transactions and discuss whether they fulfill the requirements given above and therefore are amenable to the jurisdiction of COPRA.

There should be a ‘good’ or ‘service’
This is issue is not very complicated so far as digital purchases of physical items are concerned. Since a book or a mobile phone is considered as a ‘good’ then it will always be considered as a ‘good’ irrespective of whether it has been bought from a physical shop or an online retailer. However, the question does take on an air of some complexity when dealing with digital items such as mp3 files and software programmes. The General Clauses Act, 1897 states that all property which is not immovable property is considered as movable property. Since immovable property is defined as land and things attached to the land, therefore it is pretty clear that ‘computer software’ would in all likelihood be considered as movable property. Whether such movable property can be considered as a ‘good’ or not is a question which is yet to be tested in the courts of law in India, however it must be mentioned that in the context of the Sales Tax Act, the Supreme Court of India has held canned software to be a ‘good’. Laying down a test for determining whether a property is a ‘good’ or not, the Supreme Court in that case laid down the following test:

“A 'goods' may be a tangible property or an intangible one. It would become goods provided it has the attributes thereof having regard to (a) its utility; (b) capable of being bought and sold; and (c) capable of transmitted, transferred, delivered, stored and possessed. If a software whether customized or non-customized satisfies these attributes, the same would be goods.”[3]

It must be emphasized again that the Supreme Court’s ruling was given in the context of the Sales Tax Act and it may not be accepted by a court deciding a case on COPRA. This is one issue which could and should be addressed under Indian laws to ensure that the large numbers of Indian consumers who buy items in the online marketplace are not left in a lurch and without the protection of the COPRA.

There must be a “Sale” of the good or service
Just as the previous issue, this question again can be simple when asked in relation to sale of physical goods using the internet but may not be so when talking about digital goods. When a physical item is purchased using the internet, a sale may be said to have occurred when the ownership of the good passes from the seller (online retailer) to the buyer (consumer) and the payment and delivery are complete. However, the question whether sale of software (here we are using this generic term for all sorts of computer programmes and data because the reasoning and legal analysis can be applied to both types of data) in an online environment would actually constitute a ‘sale’ requires a little more analysis. A huge problem in labeling online software purchases as a ‘sale’ is that most of these ‘sales’ are made in the form of a license. The manufacturers or retailers would argue that such an online purchase is not really a sale since the consumer usually only gets a license to use the product under strict conditions and does not buy the product as an owner, further this is really the industry standard when it comes to software purchases. The argument on the other side is that most websites advertise these products as an outside sale, for example, if you go to the Quick Heal antivirus website today and go to the page for “Home Users”[4] the page clearly shows a “Buy Now” tab and indicates the price at Rs. 1549/-. In fact in a number of cases you can actually buy the file containing the software without ever being shown the contractual terms of the agreement. These terms usually specify that you are only getting a license to use the product and may not have the right to resell or lend the product to others, rights which a traditional buyer of a product enjoys under law.

This issue was also discussed by a Full Bench of the Supreme Court of India in the case of Tata Consultancy Services v. State of Andhra Pradesh,[5] which ultimately held that the ‘sale’ of canned software (the term the court used for non customized software which is sold off the shelf) would be a sale of goods and therefore liable to be taxed under the Sales Tax Act. As is evident this decision was given in the context of the Sales Tax Act, but it could be argued that since tax statues are anyways supposed to be interpreted strictly and beneficial statutes such as the COPRA are required to be interpreted broadly, as per the accepted rules of legal interpretation, therefore it is possible that such a ‘license’ for computer software bought by an ordinary consumer could be considered as a ‘sale’ so as to bring the item within the ambit of the COPRA.

Here again we see that although there might be arguments which could be made to justify such licences for computer software as a ‘sale’, however it is still an untested issue and the COPRA certainly needs to take these issues into account if we want to protect the rights of the ever growing number of online consumers.

There should be a “defect” in the goods
If I order a pair of shoes from flpikart.com and the shoes arrive with one of the soles torn off, it’s a pretty straightforward case of there being a defect. In such a scenario unless the retailer has a specified return policy (which incidentally flipkart has) the consumer would have a right to approach the consumer forum to lodge a compliant. Similarly, if I buy a software from a manufacturer for my personal use and the file has a bug in it, it can fairly easily be considered as a defect since any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard or the good can be considered as a defect.

This is where things get a little interesting. What if we argue that stringent Digital Rights Management techniques by some online retailers are actually a defect in the goods since they do give the consumer all the rights that a buyer of goods would traditionally have. For example, if I buy an e-book with DRMs which restrict lending and on-selling, then two of my rights as a traditional book buyer are straightaway rescinded. Let us now examine the issue in the traditional context of the term ‘defect’.

If an article bought has any fault, imperfection or shortcoming in the quality, etc., then it would be considered as a defective good. For example, if a person buys a generator which is creating excessive noise, then it can be said that there is a shortcoming in the quality or the standard which is required to be maintained. A generator may supply electricity perfectly well and there may not be any fault at the time of running the machine but while operating the machine if it is creating more noise than the prescribed level, it can be said that there is a defect in the manufacture. An e-book with DRMs may also let a consumer read its contents but that may not be the only criteria to determine whether an item is defective or not. Using the traditional definition of a ‘buyer’, we can argue that a traditional buyer commonly has rights such as the right to resale, the right to make copies for personal use, the right to lend, the right to gift, etc., which may not exist in a an e-book with DRMs. Thus, an argument could be made that such measures constitute a ‘defect’ in the goods under the COPRA.

Again, this is only an argument and it is entirely possible that a court of law may reject such an argument, especially in light of the fact that the consumer has entered into a license agreement while completing the transaction which specifically grants the consumer only specific and limited rights in regard to the item being purchased. A possible counter to this argument could be that the agreement is generally long and verbose and is only presented to the consumer towards the end of the transaction when the consumer generally does not have the time to read it. Further, there is hardly ever a situation where the consumer can negotiate the terms of the contract, it is usually a standard form of contract which is heavily tilted in favour of the seller and the consumer is given no real choice in this regard. This is why in common law jurisdictions the courts have laid down certain principles or extra conditions which a standard form of contract has to abide by for it to be enforceable viz.,:

Sufficient notice: This principle requires that the major and specially the unusual terms in a contract should be displayed in a sufficiently highlighted manner so that a reasonable consumer is not likely to miss these unusual terms.[6]
Fundamental breach of contract: If the contract is so drafted that it would impose additional obligations on the consumer or restrict the liability and obligations of the seller in such a way that it would result in breaching any of the fundamental or main terms or obligations that one expects in such a contract, then such a contract may not be enforceable.[7]
Exclusion of unreasonable terms: Another type of protection that is available to consumers is the principle which seeks to exclude unreasonable terms from a contract i.e. a term which would defeat the very purpose of the contract or if it is repugnant to the public policy.[8]

Relying on the above principles of standard form contracts, it is possible to at least argue that highly strict and limiting terms which are put into a long verbose standard form contract which backs the Technology Protection Measures on a protected software may not be entirely enforceable, in which case the alleged consent of the consumer for such DRMs gets negated and the software with all its DRM limitations could be considered as ‘defective’.

Conclusion
From the discussion above it is clear that the nature of online transactions and digital goods presents certain unique problems for the legal regime which seeks to protect consumer rights. The law needs to be amended to take into account the unique circumstances of this fledging marketplace that exists online and ensure that the legal regime is fully capable of facing the challenges thrown up by e-commerce. One of the initiatives in this regard is the effort by Consumers International to include amendments in the Model United Nations Guidelines for Consumer Protection to include various provisions which deal with the online marketplace and its unique challenges as well as issues relating to access to knowledge (A2K). Perhaps it is time for the establishment in India to also take this into account and bring our quarter of a century old consumer protection legislation in line with the digital age.

[1]. http://goo.gl/Mh74vB

[2]. http://goo.gl/By5x3i

[3]. Tata Consultancy Services v. State of Andhra Pradesh, 5 November, 2004, available at http://goo.gl/Bn7KRp

[4]. http://goo.gl/lMdoI

[5].http://goo.gl/Bn7KRp

[6]. Henderson & others v. Stevenson, 1875 2 R (HL) 71, Interfoto Picture Library Ltd v. Stiletto Visual Programmes Ltd. [1988] 1 All ER 348.

[7]. Harbutt's "Plasticine" Ltd. v. Wayne Tank and Pump Co Ltd [1970] 1 QB 447.

[8]. Lily White v. R. Mannuswami, AIR 1966 Mad.13.

For more details visit https://cis-india.org/a2k/blogs/are-indian-consumers-laws-ready-for-digital-age

pranesh — 2011-09-21T06:01:54Z

CIS analyses the Copyright (Amendment) Bill, 2010, from a public interest perspective to sift the good from the bad, and importantly to point out what crucial amendments should be considered but have not been so far.

The full submission that CIS and 21 other civil society organizations made to the Rajya Sabha Standing Committee on HRD (which is studying the Bill) is available here. Given below is the summary of our submissions:

Existing Copyright Act

The Indian Copyright Act, 1957 has been designed from the perspective of a developing country. It has always attempted a balance between various kinds of interests. It has always sought to ensure that rights of authors of creative works is carefully promoted alongside the public interest served by wide availability and usability of that material. For instance, our Copyright Act has provisions for:

compulsory and statutory licensing: recognizing its importance in making works available, especially making them available at an affordable rate.
cover versions: recognizing that more players lead to a more vibrant music industry.
widely-worded right of fair dealing for private use: recognizing that individual use and large-scale commercial misuse are different.

These provisions of our Act have been lauded, and India has been rated as the most balanced copyright system in a global survey conducted of over 34 countries by Consumers International.

The Indian Parliament has always sought to be responsive to changing technologies by paying heed to both the democratisation of access as well as the securing of the interests of copyright holders. This approach needs to be lauded, and importantly, needs to be maintained.

Proposed Amendments

Some positive amendments

Fair Dealings, Parallel Importation, Non-commercial Rental: All works (including sound recordings and cinematograph films) are now covered the fair dealings clause (except computer programmes), and a few other exceptions; parallel importation is now clearly allowed; and non-commercial rental has become a limitation in some cases.
Persons with disabilities: There is finally an attempt at addressing the concerns of persons with disabilities. But the provisions are completely useless the way they are currently worded.
Public Libraries: They can now make electronic copies of works they own, and some other beneficial changes relating to public libraries.
Education: Some exceptions related to education have been broadened (scope of works, & scope of use).
Statutory and compulsory licensing: Some new statutory licensing provisions (including for radio broadcasting) and some streamlining of existing compulsory licensing provisions.
Copyright societies: These are now responsible to authors and not owners of works.
Open licences: Free and Open Source Software and Open Content licensing is now simpler.
Partial exemption of online intermediaries: Transient and incidental storage of copyrighted works has been excepted, mostly for the benefit of online intermediaries.
Performer’s rights: The general, and confusing, exclusive right that performers had to communicate their performance to the public has been removed, and instead only the exclusive right to communicate sound/video recordings remains.
Enforcement: Provisions on border measures have been made better, and less prone to abuse and prevention of legitimate trade.

Some negative amendments

WCT and WPPT compliance: India has not signed either of these two treaties, which impose TRIPS-plus copyright protection, but without any corresponding increase in fair dealing / fair use rights.
Increase in duration of copyright: This will significantly reduce the public domain, which India has been arguing for internationally.
Technological Protection Measures: TPMs, which have been shown to be anti-consumer in all countries in which they have been introduced, are sought to be brought into Indian law.
Version recordings: The amendments make cover version much more difficult to produce.
Moral rights: Changes have been made to author’s moral rights (and performer’s moral rights have been introduced) but these have been made without requisite safeguards.

Missed opportunities

Government-funded works: Taxpayers are still not free to use works that were paid for by them. This goes against the direction that India has elected to march towards with the Right to Information Act.
Copyright terms: The duration of all copyrights are above the minimum required by our international obligations, thus decreasing the public domain which is crucial for all scientific and cultural progress.
Criminal provisions: Our law still criminalises individual, non-commercial copyright infringement.
Libraries and archives: The exceptions for ‘public libraries’ are still too narrow in what they perceive as ‘public libraries’.
Educational exceptions: The exceptions for education still do not fully embrace distance and digital education.
Communication to the public: No clear definition is given of what constitute a ‘public’, and no distinction is drawn between commercial and non-commercial ‘public’ communication.
Internet intermediaries: More protections are required to be granted to Internet intermediaries to ensure that non-market based peer-production projects such as Wikipedia, and other forms of social media and grassroots innovation are not stifled.
Fair dealing and fair use: We would benefit greatly if, apart from the specific exceptions provided for in the Act, more general guidelines were also provided as to what do not constitute infringement. This would not take away from the existing exceptions.

For more details visit https://cis-india.org/a2k/blogs/copyright-bill-analysis

A Guide to Key IPR Provisions of the Proposed India-European Union Free Trade Agreement

glover — 2011-08-30T13:06:03Z

The Centre for Internet and Society presents a guide for policymakers and other stakeholders to the latest draft of the India-European Union Free Trade Agreement, which likely will be concluded by the end of the year and may hold serious ramifications for Indian businesses and consumers.

In its ongoing negotiation for a FTA with the EU, a process that began in 2007 and is expected to end sometime this year, India has won several signicant IP-related concessions. But there remain several IP issues critical to the maintenance of its developing economy, including its robust entrepreneurial environment, that India should contest further before ratifying the treaty. This guide covers the FTA's IP provisions that are within the scope of CIS' policy agenda and on which India has negotiated favorable language, as well as those provisions that it should re-negotiate or oppose.

Download the guide here, and please feel free to comment below.

You may also download a chart comparing the language proposed by India and the EU respectively with that included in the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Following is a summary of CIS' findings:

India has become a de facto leader of developing countries at the WTO, and an India-EU FTA seems likely to provide a model for FTAs between developed and developing states well into the future.
The EU has proposed articles on reproduction, communication, and broadcasting rights which could seriously undermine India's authority to regulate the use of works under copyright as currently provided for in the Berne Convention, as well as narrowing exceptions and limitations to rights under copyright.
The EU asserts that copyright includes "copyright in computer programs and in databases," without indicating whether such copyright exceeds that provided for in the Berne Convention. Moreover, by asserting that copyright "includes copyright in computer programs and in databases," the EU has left open the door for the extension of copyright to non-original databases.
India should explicitly obligate the EU to promote and encourage technology transfer -- an obligation compatible with and derived from TRIPS -- as well as propose a clear definition of technology transfer.
The EU has demanded India's accession to the WIPO Internet Treaties, the merits of which are currently under debate as India moves towards amending its Copyright Act, as well as several other international treaties that India either does not explicitly enforce or to which it is not a contracting party.
In general, the EU's provisions would extend terms of protection for material under copyright, within certain constraints, further endangering India's consumer-friendly copyright regime.
An agreement to establish arrangements between national organizations charged with collecting and distributing royalty payments may obligate such organizations in India collect royalty payments for EU rights holders on the same basis as they do for Indian rights holders, and vice versa in the EU, but more heavily burden India.
The EU has proposed a series of radical provisions on the enforcement of IPRs that are tailored almost exclusively to serve the interests of rights holders, at the expense of providing safety mechanisms for those accused of infringing or enabling infringers.
The EU has proposed, under cover of protecting intermediate service providers from liability for infringement by their users, to increase and/or place the burden on such providers of policing user activity.

For more details visit https://cis-india.org/a2k/blogs/a-guide-to-the-proposed-india-european-union-free-trade-agreement

Centre for Internet and Society

Consumer Privacy

Comments on proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020

Definitions and Registrations

Compliance

Data Protection and Surveillance

Flash Sales

Unfair Trade Practices

Jurisdictional Issues with Competition Law

Compliance with International Trade Law

Liabilities of Marketplace E-commerce Entities

Civil Society Letter Against TRIPS-Plus IP Enforcement

An Open Letter to the President of Confederation of Indian Industry (CII) on the Third International Conference on Counterfeiting & Piracy

Signatories to this letter

At the end of the niche optical pirate

Getting to the National Market

Meet the Pirate

The Business of Piracy

Enforcement Threat

Are Indian Consumer Laws Ready for the Digital Age?

Analysis of the Copyright (Amendment) Bill, 2010

Existing Copyright Act

Proposed Amendments

Some positive amendments

Some negative amendments

Missed opportunities

A Guide to Key IPR Provisions of the Proposed India-European Union Free Trade Agreement