Essay on United Nations Law on Customer Protection
United Nations Guidelines for Consumer Protection
CONSUMER PROTECTION: Consumer protection is a group of laws and organizations designed to ensure the rights of consumers as well as fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors; they may also provide additional protection for the weak and those unable to take care of themselves. Consumer protection laws are a form of government regulation, which aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of "consumer rights", and to the formation of consumer organizations, which help consumers make better choices in the marketplace and get help with consumer complaints.
Other organizations that promote consumer protection include government organizations and self-regulating business organizations such as consumer protection agencies and organizations, the Federal Trade Commission, ombudsmen, Better Business Bureaus, etc.
# The United Nations Guidelines for Consumer Protection is a declaration of best practices in consumer protection law and policy. The Guidelines are not binding, but do provide a set of basic consumer protection objectives upon which governments have agreed, thereby serving as a policy framework for implementation at a national level. Whilst directed primarily at governments, some provisions of the Guidelines are also directed at businesses.
The United Nations Guidelines For Consumer Protection as expended in 1999 is as follows:- I. Objectives 1. Taking into account the interests and needs of consumers in all countries, particularly those in developing countries; recognizing that consumers often face imbalances in economic terms, educational levels and bargaining power; and bearing in mind that consumers should have the right of access to non-hazardous products, as well as the right to promote just, equitable and sustainable economic and social development and environmental protection, these guidelines for consumer protection have the following objectives: a) To assist countries in achieving or maintaining adequate protection for their population as consumers; b) To facilitate production and distribution patterns responsive to the needs and desires of consumers; c) To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers; d) To assist countries in curbing abusive business practices by all enterprises at the national and international levels which adversely affect consumers; e) To facilitate the development of independent consumer groups; f) To further international cooperation in the field of consumer protection; g) To encourage the development of market conditions which provide consumers with greater choice at lower prices; h) To promote sustainable consumption.
II. General principles 2. Governments should develop or maintain a strong consumer protection policy, taking into account the guidelines set out below and relevant international agreements. In so doing, each Government should set its own priorities for the protection of consumers in accordance with the economic, social and environmental circumstances of the country and the needs of its population, bearing in mind the costs and benefits of proposed measures.
3. The legitimate needs which the guidelines are intended to meetare the following: a) The protection of consumers from hazards to their health and safety; b) The promotion and protection of the economic interests of consumers; c) Access of consumers to adequate information to enable them to make informed choices according to individual wishes and needs; d) Consumer education, including education on the environmental, social and economic impacts of consumer choice; e) Availability of effective consumer redress; f) Freedom to form consumer and other relevant groups or organizations and the opportunity of such organizations to present their views in decision-making processes affecting them; g) The promotion of sustainable consumption patterns 4. Unsustainable patterns of production and consumption, particularly in industrialized countries, are the major cause of the continued deterioration of the global environment. All countries should strive to promote sustainable consumption patterns; developed countries should take the lead in achieving sustainable consumption patterns; developing countries should seek to achieve sustainable consumption patterns in their development process, having due regard to the principle of common but differentiated responsibilities. The special situation and needs of developing countries in this regard should be fully taken into account. 5. Policies for promoting sustainable consumption should take into account the goals of eradicating poverty, satisfying the basic human needs of all members of society, and reducing inequality within and between countries. 6. Governments should provide or maintain adequate infrastructure to develop, implement and monitor consumer protection policies. Special care should be taken to ensure that measures for consumer protection are implemented for the benefit of all sectors of the population, particularly the rural population and people living in poverty. 7. All enterprises should obey the relevant laws and regulations of the countries in which they do business. They should also conform to the appropriate provisions of international standards for consumer protection to which the competent authorities of the country in question have agreed. 8. The potential positive role of universities and public and private enterprises in research should be considered when developing consumer protection policies.
III. Guidelines 9. The following guidelines should apply both to home-produced goods and services and to imports. 10. In applying any procedures or regulations for consumer protection, due regard should be given to ensuring that they do not become barriers to international trade and that they are consistent with international trade obligations.
A. Physical safety 11. Governments should adopt or encourage the adoption of appropriate measures, including legal systems, safety regulations, national or international standards, voluntary standards and the maintenance of safety records to ensure that products are safe for either intended or normally foreseeable use.
12. Appropriate policies should ensure that goods produced by manufacturers are safe for either intended or normally foreseeable use. Those responsible for bringing goods to the market, in particular suppliers, exporters, importers, retailers and the like (hereinafter referred to as “distributors”), should ensure that while in their care these goods are not rendered unsafe through improper handling or storage and that while in their care they do not become hazardous through improper handling or storage. Consumers should be instructed in the proper use of goods and should be informed of the risks involved in intended or normally foreseeable use. Vital safety information should be conveyed to consumers by internationally understandable symbols wherever possible.
13. Appropriate policies should ensure that if manufacturers or distributors become aware of unforeseen hazards after products are placed on the market, they should notify the relevant authorities and, as appropriate the public without delay. Governments should also consider ways of ensuring that consumers are properly informed of such hazards.
14. Governments should, where appropriate, adopt policies under which, if a product is found to be seriously defective and/or to constitute a substantial and severe hazard even when properly used, manufacturers and/or distributors should recall it and replace or modify it, or substitute another product for it; if it is not possible to do this within a reasonable period of time, the consumer should be adequately compensated.
B. Promotion and protection of consumers’ economic interests 15. Government policies should seek to enable consumers to obtain optimum benefit from their economic resources. They should also seek to achieve the goals of satisfactory production and performance standards, adequate distribution methods, fair business practices, informative marketing and effective protection against practices which could adversely affect the economic interests of consumers and the exercise of choice in the market place. 16. Governments should intensify their efforts to prevent practices which are damaging to the economic interests of consumers through ensuring that manufacturers, distributors and others involved in the provision of goods and services adhere to established laws and mandatory standards. Consumer organizations should be encouraged to monitor adverse practices, such as the adulteration of foods, false or misleading claims in marketing and service frauds. 17. Governments should develop, strengthen or maintain, as the case may be, measures relating to the control of restrictive and other abusive business practices which may be harmful to consumers, including means for the enforcement of such measures. In this connection, Governments should be guided by their commitment to the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices adopted by the General Assembly in its resolution 35/63 of 5 December 1980. 18. Governments should adopt or maintain policies that make clear the responsibility of the producer to ensure that goods meet reasonable demands of durability, utility and reliability, and are suited to the purpose for which they are intended, and that the seller should see that these requirements are met. Similar policies should apply to the provision of services.
19. Governments should encourage fair and effective competition in order to provide consumers with the greatest range of choice among products and services at the lowest cost.
20. Governments should, where appropriate, see to it that manufacturers and/or retailers ensure adequate availability of reliable after-sales service and spare parts.
21. Consumers should be protected from such contractual abuses as one-sided standard contracts, exclusion of essential rights in contracts and unconscionable conditions of credit by sellers.
22. Promotional marketing and sales practices should be guided by the principle of fair treatment of consumers and should meet legal requirements. This requires the provision of the information necessary to enable consumers to take informed and independent decisions, as well as measures to ensure that the information provided is accurate.
23. Governments should encourage all concerned to participate in the free flow of accurate information on all aspects of consumer products.
24. Consumer access to accurate information about the environmental impact of products and services should be encouraged through such means as product profiles, environmental reports by industry, information centres for consumers, voluntary and transparent eco-labelling programmes and product information hotlines.
25. Governments, in close collaboration with manufacturers, distributors and consumer organizations, should take measures regarding misleading environmental claims or information in advertising and other marketing activities. The development of appropriate advertising codes and standards for the regulation and verification of environmental claims should be encouraged.
26. Governments should, within their own national context, encourage the formulation and implementation by business, in cooperation with consumer organizations, of codes of marketing and other business practices to ensure adequate consumer protection. Voluntary agreements may also be established jointly by business, consumer organizations and other interested parties. These codes should receive adequate publicity.8 United Nations guidelines on consumer protection as expanded in 1999
27. Governments should regularly review legislation pertaining to weights and measures and assess the adequacy of the machinery for its enforcement.
C. Standards for the safety and quality of consumer goods and services 28. Governments should, as appropriate, formulate or promote the elaboration and implementation of standards, voluntary and other, at the national and international levels for the safety and quality of goods and services and give them appropriate publicity. National standards and regulations for product safety and quality should be reviewed from time to time, in order to ensure that they conform, where possible, to generally accepted international standards. 29. Where a standard lower than the generally accepted international standard is being applied because of local economic conditions, every effort should be made to raise that standard as soon as possible. 30. Governments should encourage and ensure the availability of facilities to test and certify the safety, quality and performance of essential consumer goods and services. D. Distribution facilities for essential consumer goods and services 31. Governments should, where appropriate, consider: a) Adopting or maintaining policies to ensure the efficient distribution of goods and services to consumers; where appropriate, specific policies should be considered to ensure the distribution of essential goods and services where this distribution is endangered, as could be the case particularly in rural areas. Such policies could include assistance for the creation of adequate storage and retail facilities in rural centres, incentives for consumer self-help and better control of the conditions under which essential goods and services are provided in rural areas; b) Encouraging the establishment of consumer cooperatives and related trading activities, as well as information about them, especially in rural areas. E. Measures enabling consumers to obtain redress 32. Governments should establish or maintain legal and/or administrative measures to enable consumers or, as appropriate, relevant organizations to obtain redress through formal or informal procedures that are expeditious, fair, inexpensive and accessible. Such procedures should take particular account of the needs of low-income consumers. 33. Governments should encourage all enterprises to resolve consumer disputes in a fair, expeditious and informal manner, and to establish voluntary mechanisms, including advisory services and informal complaints procedures, which can provide assistance to consumers. 34. Information on available redress and other dispute-resolving procedures should be made available to consumers. Education and information programmes
35. Governments should develop or encourage the development of general consumer education and information programmes, including information on the environmental impacts of consumer choices and behaviour and the possible implications, including benefits and costs, of changes in consumption, bearing in mind the cultural traditions of the people concerned. The aim of such programmes should be to enable people to act as discriminating consumers, capable of making an informed choice of goods and services, and conscious of their rights and responsibilities. In developing such programmes, special attention should be given to the needs of disadvantaged consumers, in both rural and urban areas, including low income consumers and those with low or non-existent literacy levels. Consumer groups, business and other relevant organizations of civil society should be involved in these educational efforts.
36. Consumer education should, where appropriate, become an integral part of the basic curriculum of the educational system, preferably as a component of existing subjects.
37. Consumer education and information programmes should cover such important aspects of consumer protection as the following: a) Health, nutrition, prevention of food-borne diseases and food adulteration; b) Product hazards; c) Product labelling; d) Relevant legislation, how to obtain redress, and agencies and organizations for consumer protection; e) Information on weights and measures, prices, quality, credit conditions and availability of basic necessities; f) Environmental protection; g) Efficient use of materials, energy and water.
38. Governments should encourage consumer organizations and other interested groups, including the media, to undertake education and information programmes, including on the environmental impacts of consumption patterns and on the possible implications, including benefits and costs, of changes in consumption, particularly for the benefit of low income consumer groups in rural and urban areas. 39. Business should, where appropriate, undertake or participate in factual and relevant consumer education and information programmes. 40. Bearing in mind the need to reach rural consumers and illiterate consumers, Governments should, as appropriate, develop or encourage the development of consumer information programmes in the mass media. 41. Governments should organize or encourage training programmes for educators, mass media professionals and consumer advisers, to enable them to participate in carrying out consumer information and education programmes.
F. Promotion of sustainable consumption 42. Sustainable consumption includes meeting the needs of present and future generations for goods and services in ways that are economically, socially and environmentally sustainable. 43. Responsibility for sustainable consumption is shared by all members and organizations of society, with informed consumers, Government, business, labour organizations, and consumer and environmental organizations playing particularly important roles. Informed consumers have an essential role in promoting consumption that is environmentally, economically and socially sustainable, including through the effects of their choices on producers. Governments should promote the development and implementation of policies for sustainable consumption and the integration of those policies with other public policies. Government policymaking should be conducted in consultation with business, consumer and environmental organizations, and other concerned groups. Business has a responsibility for promoting sustainable consumption through the design, production and distribution of goods and services. Consumer and environmental organizations have a responsibility for promoting public participation and debate on sustainable consumption, for informing consumers, and for working with Government and business towards sustainable consumption. 44. Governments, in partnership with business and relevant organizations of civil society, should develop and implement strategies that promote sustainable consumption through a mix of policies that could include regulations; economic and social instruments; sectoral policies in such areas as land use, transport, energy and housing; information programmes to raise awareness of the impact of consumption patterns; removal of subsidies that promote unsustainable patterns of consumption and production; and promotion of sector-specific environmental-management best practices. 45. Governments should encourage the design, development and use of products and services that are safe and energy and resource efficient considering their full life-cycle impacts. Governments should encourage recycling programmes that encourage consumers to both recycle wastes and purchase recycled products. 46. Governments should promote the development and use of national and international environmental health and safety standards for products and services; such standards should not result in disguised barriers to trade. 47. Governments should encourage impartial environmental testing of products. 48. Governments should safely manage environmentally harmful uses of substances and encourage the development of environmentally sound alternatives for such uses. New potentially hazardous substances should be evaluated on a scientific basis for their long-term environmental impact prior to distribution. 49. Governments should promote awareness of the health-related benefits of sustainable consumption and production patterns, bearing in mind both direct effects on individual health and collective effects through environmental protection. 50. Governments, in partnership with the private sector and other relevant organizations, should encourage the transformation of unsustainable consumption patterns through the development and use of new environmentally sound products and services and new technologies, including information and communication technologies, that can meet consumer needs while reducing pollution and depletion of natural resources.
51. Governments are encouraged to create or strengthen effective regulatory mechanisms for the protection of consumers, including aspects of sustainable consumption. 52. Governments should consider a range of economic instruments, such as fiscal instruments and internalization of environmental costs, to promote sustainable consumption, taking into account social needs, the need for disincentives for unsustainable practices and incentives for more sustainable practices, while avoiding potential negative effects for market access, in particular for developing countries. 53. Governments, in cooperation with business and other relevant groups, should develop indicators, methodologies and databases for measuring progress towards sustainable consumption at all levels. This information should be publicly available. 54. Governments and international agencies should take the lead in introducing sustainable practices in their own operations, in particular through their procurement policies. Government procurement, as appropriate, should encourage development and use of environmentally sound products and services. 55. Governments and other relevant organizations should promote research on consumer behaviour related to environmental damage in order to identify ways to make consumption patterns more sustainable.
G. Measures relating to specific areas
56. In advancing consumer interests, particularly in developing countries, Governments should, where appropriate, give priority to areas of essential concern for the health of the consumer, such as food, water and pharmaceuticals. Policies should be adopted or maintained for product quality control, adequate and secure distribution facilities, standardize international labelling and information, as well as education and research programmes in these areas. Government guidelines in regard to specific areas should be developed in the context of the provisions of this document.
Food 57. When formulating national policies and plans with regard to food, Governments should take into account the need of all consumers for food security, and should support and, as far as possible, adopt standards from the Food and Agriculture Organization of the United Nations and the World Health Organization Codex Alimentarius or, in their absence, other generally accepted international food standards. Governments should maintain, develop or improve food safety measures, including, inter alia, safety criteria, food standards and dietary requirements and effective monitoring, inspection and evaluation mechanisms. 58. Governments should promote sustainable agricultural policies and practices, conservation of biodiversity, and protection of soil and water, taking into account traditional knowledge.
Water
59. Governments should, within the goals and targets set for the International Drinking Water Supply and Sanitation Decade, formulate, maintain or strengthen national policies to improve the supply, distribution and quality of water for drinking. Due regard should be paid to the choice of appropriate levels of service, quality and technology, the need for education programmes and the importance of community participation. 60. Governments should assign high priority to the formulation and implementation of policies and programmes concerning the multiple uses of water, taking into account the importance of water for sustainable development in general and its finite character as a resource.
Pharmaceuticals 61. Governments should develop or maintain adequate standards, provisions and appropriate regulatory systems for ensuring the quality and appropriate use of pharmaceuticals through integrated national drug policies which could address, inter alia, procurement, distribution, production, licensing arrangements, registration systems and the availability of reliable information on pharmaceuticals. In so doing, Governments should take special account of the work and recommendations of the World Health Organization on pharmaceuticals. For relevant products, the use of that organization’s Certification Scheme on the Quality of Pharmaceutical Products Moving in International Commerce and other international information systems on pharmaceuticals should be encouraged. Measures should also be taken, as appropriate, to promote the use of international non-proprietary names (INNs) for drugs, drawing on the work done by the World Health Organization. 62. In addition to the priority areas indicated above, Governments should adopt appropriate measures in other areas, such as pesticides and chemicals, in regard, where relevant, to their use, production and storage, taking into account such relevant health and environmental information as Governments may require producers to provide and include in the labelling of products.
IV. International cooperation 63. Governments should, especially in a regional or sub regional context: a) Develop, review, maintain or strengthen, as appropriate, mechanisms for the exchange of information on national policies and measure in the field of consumer protection; b) Cooperate or encourage cooperation in the implementation of consumer protection policies to achieve greater results within existing resources. Examples of such cooperation could be collaboration in the setting up or joint use of testing facilities, common testing procedures exchange of consumer information and education programmes, joint training programmes and joint elaboration of regulations;
(c) Cooperate to improve the conditions under which essential goods are offered to consumers, giving due regard to both price and quality. Such cooperation could include joint procurement of essential goods, exchange of information on different procurement possibilities and agreements on regional product specifications. 64. Governments should develop or strengthen information link regarding products which have been banned, withdrawn or several restricted in order to enable other importing countries to protect themselves adequately against the harmful effects of such products.
65. Governments should work to ensure that the quality of products, and information relating to such products, does not vary from country to country in a way that would have detrimental effects on consumers.
66. To promote sustainable consumption, Governments, international bodies and business should work together to develop, transfer and disseminate environmentally sound technologies, including through appropriate financial support from developed countries, and to devise new and innovative mechanisms for financing their transfer among all countries, in particular to and among developing countries and countries with economies in transition.
67. Governments and international organizations, as appropriate should promote and facilitate capacity-building in the area of sustainable consumption, particularly in developing countries and countries with economies in transition. In particular, Governments should also facilitate cooperation among consumer groups and other relevant organizations of civil society, with the aim of strengthening capacity in this area.
68. Governments and international bodies, as appropriate, should promote programmes relating to consumer education and information.
69. Governments should work to ensure that policies and measures for consumer protection are implemented with due regard to their not becoming barriers to international trade, and that they are consistent with international trade obligations.
Comparison of the Jurisdiction Across Various Countries
Following table identifies various differences between consumer protection legislation in New Zealand, Australia, Canada, UK and USA: Issue | India | New Zealand | Australia | | | | | Definition of consumer | Buys or hires any goods for a consideration which has been paid or promised or partly paid and partly promised | Consumer definition in the CGA focuses on consumers and type and use of goods. | Consumer definition includes consumers and small business. | Prohibitions - unfair terms in consumer contracts | Unfair terms in consumer act are strictly prohibited. | No specific prohibition for unfair terms in consumer contracts. | Unfair terms in consumer contracts are prohibited in state of Victoria. | Prohibitions - unconscionable conduct | Unconscionable conduct is covered by consumer law as well as IPC. | Unconscionable conduct is covered by common law and Courts must decide if conduct is unconscionable. | Unconscionable conduct is covered by statute as well as common law. Courts must decide if conduct is unconscionable. | Industry codes of conduct | NHRC defined code of conduct to curb human right violation. | Provisions covering industry codes of practice are not in legislation. | Provisions covering industry codes in legislation and overseen by ACCC. | Enforcement - court enforceable undertakings | Enforceable by court at state and national levels. | No court-enforceable undertakings available. The Commerce Commission uses the administrative system of settlements. | At federal and state level, contravention of an undertaking can result in court action by the enforcement agency. | Enforcement - compulsory Interview | Interviews are compulsory for any person appearing in the court. | No ability to require a trader to attend a compulsory interview. | ACCC has the power to issue demands for information, including appearing before the ACCC in person. Also a requirement in some state legislation. | Enforcement - banning traders | Can be banned in case of serious trade offenders.Ex. – Plastic Ban | No ability to ban a recidivist offender. | Some states can ban traders from supplying goods and services. | Enforcement - super-complaints | Consumer complaints are handled by special consumer courts. | Consumer bodies do not have a special ability to refer consumer complaints to Commerce Commission. | Consumer bodies do not have a special ability to refer consumer complaints to ACCC. | Enforcement - product safety | Warning by direct notice and press releases. | No requirement for Product Safety Warning Notices. | Product Safety Warning Notices published in the Gazette announce when a good is under investigation for being unsafe. | Redress - defective product | A consumer who is impacted by defective product can approach consumer courts. | A person who has suffered injury from a defective product is covered by ACC. | A person who has suffered loss or damage from a defective product can take private court action. | Issue | Canada | United Kingdom | USA | | | | | Definition of consumer | Provincial definitions define consumers as non-traders. | General definitions in various statutes. Consumers are non-traders. | Law has several definitions of consumer, depending on context. If comparison is made with legislation that has provisions that are the equivalent of CGA, the consumer definition is very similar to NZ definition. | Prohibitions - unfair terms in consumer contracts | Many provincial governments prohibit unfair practices which include unfair terms in consumer contracts. | Unfair terms in consumer contracts are prohibited. | The Uniform Commercial Code (adopted by most states) prohibits terms in contracts that are unconscionable. | Prohibitions - unconscionable conduct | Unconscionable conduct prohibitions are in statute. | Unconscionable conduct is covered by common law only. Courts must decide if conduct is unconscionable. | Uniform Commercial Code prohibits unbalanced contracts, but unconscionable conduct is left to the courts to decide. | Industry codes of conduct | Provisions covering industry codes of practice are not in legislation. | Legislation allows the OFT to approve and promote industry codes. | Provisions covering industry codes of practice are not in legislation | Enforcement - court enforceable undertakings | At federal and provincial level, contravention of an undertaking can result in court action by the enforcement agency. | Contravention of an undertaking can result in court action by the enforcement agency. | Breach of a "cease and desist" order (more of an undertaking) can result in court action taken by the enforcement agency and a fine. | Enforcement - compulsory Interview | Traders voluntarily attend an interview at both federal and provincial level. | Formal interviews can be carried out, in accordance with The Police and Criminal Evidence Act 1984. | "Civil Investigative Demands" can be used to gain verbal testimony. | Enforcement - banning traders | Courts can ban individuals from trading for a period of time. | No banning provisions. | Courts have the ability to bar an individual from making claims without substantiation. Provisions appear to ban activities rather than individuals. | Enforcement - super-complaints | Consumer bodies do not have a special ability to refer consumer complaints to the enforcement agencies. | Designated consumer bodies can lodge super-complaints to the OFT. | Consumer bodies do not have a special ability to refer consumer complaints to the enforcement agencies. | Enforcement - product safety | No warning notices. Notification of warning through press releases. | No warning notices. Notification of warning through press releases. | No warning notices. Onus on companies to issue forms of notification. | Redress - defective product | A person who has suffered loss or damage from a defective product can take private court action. | A person who has suffered loss or damage from a defective product can take private court action. | A person who has suffered loss or damage from a defective product can take private court action. |
Restrictive Trade Practices Under Consumer Protection Act
“Restrictive Trade Practice” means a trade practice which tends to bring about manipulation of price or conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include—
(a) Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price;
(b) Any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services;
Unfair Trade Practices Under Consumer Protection Act, 1986
"Unfair Trade Practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely;—
(1) The practice of making any statement, whether orally or in writing or by visible representation which,—
(i) Falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
(ii) Falsely represents that the services are of a particular standard, quality or grade;
(iii) Falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
(iv) Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;
(v) Represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;
(vi) Makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
(vii) Gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof; Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;
(viii) Makes to the public a representation in a form that purports to be— a. A warranty or guarantee of a product or of any goods or services; or b. A promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;
(ix) Materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;
(x) Gives false or misleading facts disparaging the goods, services or trade of another person.
Explanation - For the purposes of clause (1), a statement that is—
(a) Expressed on an article offered or displayed for sale, or on its wrapper or container; or
(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or
(c) Contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public, shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;
(2) Permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.
Explanation — For the purpose of clause (2), "bargaining price" means—
(a) A price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or
(b) A price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;
(3) Permits—
(a) The offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;
(b) The conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;
(3A) Withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final results of the scheme.
Explanation — For the purposes of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time, published, prominently in the same newspapers in which the scheme was originally advertised;
(4) Permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;
(5) Permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.
(6) Manufacture of spurious goods or offering such goods for sale or adopts deceptive practices in the provision of services.
Consumer Protection Council:
1. The Central Consumer Protection Council —
(1) The Central Government shall, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council).
(2) The Central Council shall consist of the following members, namely:— a. The Minister in charge of the consumer affairs in the Central Government, who shall be its Chairman, and b. Such number of other official or non-official members representing such interests as may be prescribed.
2. Procedure for meetings of the Central Council —
(1) The Central Council shall meet as and when necessary, but at least one meeting of the Council shall be held every year.
(2) The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.
3. Objects of the Central Council — The objects of the Central Council shall be to promote and protect the rights of the consumers such as,— a. The right to be protected against the marketing of goods and services which are hazardous to life and property; b. Right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be so as to protect the consumer against unfair trade practices; c. The right to be assured, wherever possible, access to a variety of goods and services at competitive prices; d. The right to be heard and to be assured that consumer's interests will receive due consideration at appropriate forums; e. The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers; and f. The right to consumer education.
4. The State Consumer Protection Councils –
(1) The State Government shall, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Consumer Protection Council for (hereinafter referred to as the State Council).
(2) The State Council shall consist of the following members, namely — A. The Minister in charge of consumer affairs in the State Government who shall be its Chairman; B. Such number of other official or non-official members representing such interests as may be prescribed by the State Government. C. Such number of other official or non-official members, not exceeding ten, as may be nominated by the Central Government.
(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.
(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.
5. Objects of the State Council. — The objects of every State Council shall be to promote and protect within the State the rights of the consumers laid down in clauses (a) to (f) of section 6.
5A. (1) The State Government shall establish for every district, by notification, a council to be known as the District Consumer Protection Council with effect from such date as it may specify in such notification.
(2) The District Consumer Protection Council (hereinafter referred to as the District Council) shall consist of the following members, namely:—
(a) the Collector of the district (by whatever name called), who shall be its Chairman; and
(b) Such number of other official and non-official members representing such interests as may be prescribed by the State Government.
(3) The District Council shall meet as and when necessary but not less than two meetings shall be held every year.
(4) The District Council shall meet at such time and place within the district as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.
5B. The objects of every District Council shall be to promote and protect within the district the rights of the consumers laid down in clauses (a) to (f) of section 6.
Tie up sales:
Tie up sales means a trade practice which tends to being about manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or service in such a manner as to impose on the consumers unjustified costs or restrictions and shall include –
(a) Delay beyond the period agreed to be a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; (b) Any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be services as-condition precedent to buying, hiring or availing of other goods or services.
An analysis of above definition reveals that where sale or purchase of a product or service is made conditional on the sale or purchase of one or more other products and services, it amounts to restrictive trade practice.
Technically, this type of arrangement is called ‘tie-up sales’ or ‘tying arrangement’. The effect of such an arrangement is that a purchaser is forced to buy some goods or services which he may not require alongwith the goods or services which he wants to buy. Thus where a buyer agrees to purchase product ‘X’ upon a condition that he will also purchase product ‘Y’ from the seller, the sale of product ‘Y’ (tied product) is tied to the sale of product ‘X’ (tying product).
It is also called as restrictive trade practices which includes requiring a person to purchase or hire goods or avail services else compulsorily along with the goods he wants to have or service he wants to avail. For example, accompany has two products A and B out of which A is popular but B is not. If it is said that A will not be given unless B is also purchased e.g. forcing dealers to purchase tooth brush (which is not very popular) along with tooth paste (which is popular).
For the purposes of this Act, "restrictive trade practice" refers to an act performed by one or more persons engaged in production or distribution of goods or services which- a. In respect of other persons offering the skills, motivation and minimum seed capital required in order competing at fair market prices in any field of production or distribution reduces or eliminates their opportunities so to participate
b. In respect of other persons able and willing to pay fair market prices for goods or services, either for production for resale or final consumption reduces or eliminates their opportunities to acquire those goods or services.
2. For the purposes of subsection (1) reduction or elimination of opportunities is to be measured with reference to the situation that would retain in the absence of the practices in question.
3. Subject to exemptions set out in section 5, the practices enumerated in sections 6 to 12 are declared to be restrictive trade practices for the purposes of this Act.
4. The following trade practices are exempted from the provisions of this Act- Exemptions
a. Trade practices which are directly and necessarily associated with the exercise of exclusive or preferential trading privileges conferred on any person by an Act of Parliament or by an agency of the Government acting in accordance with authority conferred on it by an Act of Parliament. b. Trade practices which are directly and necessarily associated with the licensing of participants in certain trades and professions by agencies of the Government acting in accordance with authority conferred on them by an Act of Parliament.
Enumeration of restrictive trade practices
(1) For the purposes of this Act. Following categories of trade agreements are declared to be restrictive trade actives- Category.
(2) No agreement or arrangement belonging to a category enumerated in subsection (1) shall be enforceable in legal proceedings after the commencement of this Act nor shall any person bring a suit against any other person by reason of failure to observe or adhere to the terms of that agreement or arrangement or by reason of damages arising from that failure.
(3) An agreement or arrangement enumerated in sub section (1) shall be regarded as a restrictive trade practice for the purposes of this Act whether or not the agreement or arrangement is intended to be enforceable by legal proceedings.
(4) Where an agreement is made by a trade association the agreement shall be deemed to be made by the association and by all persons who are members of the association or represented thereon as if each of those persons were a party to the agreement.
Some of the examples of Restrictive Trade Practices are: 1. Compelling consumers to buy modem with a broadband connection. 2. Asking a person to keep some amount as fixed deposit before allotting him a locker in bank. 3. Compulsory service contract. 4. Uniform and books from school only. 5. A gas distributor instead his customers to buy gas stove as a condition to give gas connection. It was held that it was a restrictive trade practice - Re. Anand Gas RTPE 43/1983 (MRTPC).
However, where there is no such precondition and the buyer is free to take either product, no tying arrangement could be alleged even though the seller may offer both the products as a single unit at a composite price. Examples where practise held is not restrictive: In some cases, tie-up was not held as restrictive. Some examples are 1. Insistence by car manufacturer that, during the warranty period, air-conditioner can be-fitted to car only by authorised dealer to ensure that improper air-conditioner does not affect the performance of car during warranty.
2. A is a furniture dealer. He is selling Sofa at Rs. 20,000 and Bed at Rs. 15,000. He has an offer that whoever will buy Sofa and Bed both, he will charge Rs. 30,000 only. Here the choice is open to the customer to buy the products single or composite. This is not a restrictive trade practice.
CONSUMER PROTECTION: Consumer protection is a group of laws and organizations designed to ensure the rights of consumers as well as fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors; they may also provide additional protection for the weak and those unable to take care of themselves. Consumer protection laws are a form of government regulation, which aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of "consumer rights", and to the formation of consumer organizations, which help consumers make better choices in the marketplace and get help with consumer complaints.
Other organizations that promote consumer protection include government organizations and self-regulating business organizations such as consumer protection agencies and organizations, the Federal Trade Commission, ombudsmen, Better Business Bureaus, etc.
# The United Nations Guidelines for Consumer Protection is a declaration of best practices in consumer protection law and policy. The Guidelines are not binding, but do provide a set of basic consumer protection objectives upon which governments have agreed, thereby serving as a policy framework for implementation at a national level. Whilst directed primarily at governments, some provisions of the Guidelines are also directed at businesses.
The United Nations Guidelines For Consumer Protection as expended in 1999 is as follows:- I. Objectives 1. Taking into account the interests and needs of consumers in all countries, particularly those in developing countries; recognizing that consumers often face imbalances in economic terms, educational levels and bargaining power; and bearing in mind that consumers should have the right of access to non-hazardous products, as well as the right to promote just, equitable and sustainable economic and social development and environmental protection, these guidelines for consumer protection have the following objectives: a) To assist countries in achieving or maintaining adequate protection for their population as consumers; b) To facilitate production and distribution patterns responsive to the needs and desires of consumers; c) To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers; d) To assist countries in curbing abusive business practices by all enterprises at the national and international levels which adversely affect consumers; e) To facilitate the development of independent consumer groups; f) To further international cooperation in the field of consumer protection; g) To encourage the development of market conditions which provide consumers with greater choice at lower prices; h) To promote sustainable consumption.
II. General principles 2. Governments should develop or maintain a strong consumer protection policy, taking into account the guidelines set out below and relevant international agreements. In so doing, each Government should set its own priorities for the protection of consumers in accordance with the economic, social and environmental circumstances of the country and the needs of its population, bearing in mind the costs and benefits of proposed measures.
3. The legitimate needs which the guidelines are intended to meetare the following: a) The protection of consumers from hazards to their health and safety; b) The promotion and protection of the economic interests of consumers; c) Access of consumers to adequate information to enable them to make informed choices according to individual wishes and needs; d) Consumer education, including education on the environmental, social and economic impacts of consumer choice; e) Availability of effective consumer redress; f) Freedom to form consumer and other relevant groups or organizations and the opportunity of such organizations to present their views in decision-making processes affecting them; g) The promotion of sustainable consumption patterns 4. Unsustainable patterns of production and consumption, particularly in industrialized countries, are the major cause of the continued deterioration of the global environment. All countries should strive to promote sustainable consumption patterns; developed countries should take the lead in achieving sustainable consumption patterns; developing countries should seek to achieve sustainable consumption patterns in their development process, having due regard to the principle of common but differentiated responsibilities. The special situation and needs of developing countries in this regard should be fully taken into account. 5. Policies for promoting sustainable consumption should take into account the goals of eradicating poverty, satisfying the basic human needs of all members of society, and reducing inequality within and between countries. 6. Governments should provide or maintain adequate infrastructure to develop, implement and monitor consumer protection policies. Special care should be taken to ensure that measures for consumer protection are implemented for the benefit of all sectors of the population, particularly the rural population and people living in poverty. 7. All enterprises should obey the relevant laws and regulations of the countries in which they do business. They should also conform to the appropriate provisions of international standards for consumer protection to which the competent authorities of the country in question have agreed. 8. The potential positive role of universities and public and private enterprises in research should be considered when developing consumer protection policies.
III. Guidelines 9. The following guidelines should apply both to home-produced goods and services and to imports. 10. In applying any procedures or regulations for consumer protection, due regard should be given to ensuring that they do not become barriers to international trade and that they are consistent with international trade obligations.
A. Physical safety 11. Governments should adopt or encourage the adoption of appropriate measures, including legal systems, safety regulations, national or international standards, voluntary standards and the maintenance of safety records to ensure that products are safe for either intended or normally foreseeable use.
12. Appropriate policies should ensure that goods produced by manufacturers are safe for either intended or normally foreseeable use. Those responsible for bringing goods to the market, in particular suppliers, exporters, importers, retailers and the like (hereinafter referred to as “distributors”), should ensure that while in their care these goods are not rendered unsafe through improper handling or storage and that while in their care they do not become hazardous through improper handling or storage. Consumers should be instructed in the proper use of goods and should be informed of the risks involved in intended or normally foreseeable use. Vital safety information should be conveyed to consumers by internationally understandable symbols wherever possible.
13. Appropriate policies should ensure that if manufacturers or distributors become aware of unforeseen hazards after products are placed on the market, they should notify the relevant authorities and, as appropriate the public without delay. Governments should also consider ways of ensuring that consumers are properly informed of such hazards.
14. Governments should, where appropriate, adopt policies under which, if a product is found to be seriously defective and/or to constitute a substantial and severe hazard even when properly used, manufacturers and/or distributors should recall it and replace or modify it, or substitute another product for it; if it is not possible to do this within a reasonable period of time, the consumer should be adequately compensated.
B. Promotion and protection of consumers’ economic interests 15. Government policies should seek to enable consumers to obtain optimum benefit from their economic resources. They should also seek to achieve the goals of satisfactory production and performance standards, adequate distribution methods, fair business practices, informative marketing and effective protection against practices which could adversely affect the economic interests of consumers and the exercise of choice in the market place. 16. Governments should intensify their efforts to prevent practices which are damaging to the economic interests of consumers through ensuring that manufacturers, distributors and others involved in the provision of goods and services adhere to established laws and mandatory standards. Consumer organizations should be encouraged to monitor adverse practices, such as the adulteration of foods, false or misleading claims in marketing and service frauds. 17. Governments should develop, strengthen or maintain, as the case may be, measures relating to the control of restrictive and other abusive business practices which may be harmful to consumers, including means for the enforcement of such measures. In this connection, Governments should be guided by their commitment to the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices adopted by the General Assembly in its resolution 35/63 of 5 December 1980. 18. Governments should adopt or maintain policies that make clear the responsibility of the producer to ensure that goods meet reasonable demands of durability, utility and reliability, and are suited to the purpose for which they are intended, and that the seller should see that these requirements are met. Similar policies should apply to the provision of services.
19. Governments should encourage fair and effective competition in order to provide consumers with the greatest range of choice among products and services at the lowest cost.
20. Governments should, where appropriate, see to it that manufacturers and/or retailers ensure adequate availability of reliable after-sales service and spare parts.
21. Consumers should be protected from such contractual abuses as one-sided standard contracts, exclusion of essential rights in contracts and unconscionable conditions of credit by sellers.
22. Promotional marketing and sales practices should be guided by the principle of fair treatment of consumers and should meet legal requirements. This requires the provision of the information necessary to enable consumers to take informed and independent decisions, as well as measures to ensure that the information provided is accurate.
23. Governments should encourage all concerned to participate in the free flow of accurate information on all aspects of consumer products.
24. Consumer access to accurate information about the environmental impact of products and services should be encouraged through such means as product profiles, environmental reports by industry, information centres for consumers, voluntary and transparent eco-labelling programmes and product information hotlines.
25. Governments, in close collaboration with manufacturers, distributors and consumer organizations, should take measures regarding misleading environmental claims or information in advertising and other marketing activities. The development of appropriate advertising codes and standards for the regulation and verification of environmental claims should be encouraged.
26. Governments should, within their own national context, encourage the formulation and implementation by business, in cooperation with consumer organizations, of codes of marketing and other business practices to ensure adequate consumer protection. Voluntary agreements may also be established jointly by business, consumer organizations and other interested parties. These codes should receive adequate publicity.8 United Nations guidelines on consumer protection as expanded in 1999
27. Governments should regularly review legislation pertaining to weights and measures and assess the adequacy of the machinery for its enforcement.
C. Standards for the safety and quality of consumer goods and services 28. Governments should, as appropriate, formulate or promote the elaboration and implementation of standards, voluntary and other, at the national and international levels for the safety and quality of goods and services and give them appropriate publicity. National standards and regulations for product safety and quality should be reviewed from time to time, in order to ensure that they conform, where possible, to generally accepted international standards. 29. Where a standard lower than the generally accepted international standard is being applied because of local economic conditions, every effort should be made to raise that standard as soon as possible. 30. Governments should encourage and ensure the availability of facilities to test and certify the safety, quality and performance of essential consumer goods and services. D. Distribution facilities for essential consumer goods and services 31. Governments should, where appropriate, consider: a) Adopting or maintaining policies to ensure the efficient distribution of goods and services to consumers; where appropriate, specific policies should be considered to ensure the distribution of essential goods and services where this distribution is endangered, as could be the case particularly in rural areas. Such policies could include assistance for the creation of adequate storage and retail facilities in rural centres, incentives for consumer self-help and better control of the conditions under which essential goods and services are provided in rural areas; b) Encouraging the establishment of consumer cooperatives and related trading activities, as well as information about them, especially in rural areas. E. Measures enabling consumers to obtain redress 32. Governments should establish or maintain legal and/or administrative measures to enable consumers or, as appropriate, relevant organizations to obtain redress through formal or informal procedures that are expeditious, fair, inexpensive and accessible. Such procedures should take particular account of the needs of low-income consumers. 33. Governments should encourage all enterprises to resolve consumer disputes in a fair, expeditious and informal manner, and to establish voluntary mechanisms, including advisory services and informal complaints procedures, which can provide assistance to consumers. 34. Information on available redress and other dispute-resolving procedures should be made available to consumers. Education and information programmes
35. Governments should develop or encourage the development of general consumer education and information programmes, including information on the environmental impacts of consumer choices and behaviour and the possible implications, including benefits and costs, of changes in consumption, bearing in mind the cultural traditions of the people concerned. The aim of such programmes should be to enable people to act as discriminating consumers, capable of making an informed choice of goods and services, and conscious of their rights and responsibilities. In developing such programmes, special attention should be given to the needs of disadvantaged consumers, in both rural and urban areas, including low income consumers and those with low or non-existent literacy levels. Consumer groups, business and other relevant organizations of civil society should be involved in these educational efforts.
36. Consumer education should, where appropriate, become an integral part of the basic curriculum of the educational system, preferably as a component of existing subjects.
37. Consumer education and information programmes should cover such important aspects of consumer protection as the following: a) Health, nutrition, prevention of food-borne diseases and food adulteration; b) Product hazards; c) Product labelling; d) Relevant legislation, how to obtain redress, and agencies and organizations for consumer protection; e) Information on weights and measures, prices, quality, credit conditions and availability of basic necessities; f) Environmental protection; g) Efficient use of materials, energy and water.
38. Governments should encourage consumer organizations and other interested groups, including the media, to undertake education and information programmes, including on the environmental impacts of consumption patterns and on the possible implications, including benefits and costs, of changes in consumption, particularly for the benefit of low income consumer groups in rural and urban areas. 39. Business should, where appropriate, undertake or participate in factual and relevant consumer education and information programmes. 40. Bearing in mind the need to reach rural consumers and illiterate consumers, Governments should, as appropriate, develop or encourage the development of consumer information programmes in the mass media. 41. Governments should organize or encourage training programmes for educators, mass media professionals and consumer advisers, to enable them to participate in carrying out consumer information and education programmes.
F. Promotion of sustainable consumption 42. Sustainable consumption includes meeting the needs of present and future generations for goods and services in ways that are economically, socially and environmentally sustainable. 43. Responsibility for sustainable consumption is shared by all members and organizations of society, with informed consumers, Government, business, labour organizations, and consumer and environmental organizations playing particularly important roles. Informed consumers have an essential role in promoting consumption that is environmentally, economically and socially sustainable, including through the effects of their choices on producers. Governments should promote the development and implementation of policies for sustainable consumption and the integration of those policies with other public policies. Government policymaking should be conducted in consultation with business, consumer and environmental organizations, and other concerned groups. Business has a responsibility for promoting sustainable consumption through the design, production and distribution of goods and services. Consumer and environmental organizations have a responsibility for promoting public participation and debate on sustainable consumption, for informing consumers, and for working with Government and business towards sustainable consumption. 44. Governments, in partnership with business and relevant organizations of civil society, should develop and implement strategies that promote sustainable consumption through a mix of policies that could include regulations; economic and social instruments; sectoral policies in such areas as land use, transport, energy and housing; information programmes to raise awareness of the impact of consumption patterns; removal of subsidies that promote unsustainable patterns of consumption and production; and promotion of sector-specific environmental-management best practices. 45. Governments should encourage the design, development and use of products and services that are safe and energy and resource efficient considering their full life-cycle impacts. Governments should encourage recycling programmes that encourage consumers to both recycle wastes and purchase recycled products. 46. Governments should promote the development and use of national and international environmental health and safety standards for products and services; such standards should not result in disguised barriers to trade. 47. Governments should encourage impartial environmental testing of products. 48. Governments should safely manage environmentally harmful uses of substances and encourage the development of environmentally sound alternatives for such uses. New potentially hazardous substances should be evaluated on a scientific basis for their long-term environmental impact prior to distribution. 49. Governments should promote awareness of the health-related benefits of sustainable consumption and production patterns, bearing in mind both direct effects on individual health and collective effects through environmental protection. 50. Governments, in partnership with the private sector and other relevant organizations, should encourage the transformation of unsustainable consumption patterns through the development and use of new environmentally sound products and services and new technologies, including information and communication technologies, that can meet consumer needs while reducing pollution and depletion of natural resources.
51. Governments are encouraged to create or strengthen effective regulatory mechanisms for the protection of consumers, including aspects of sustainable consumption. 52. Governments should consider a range of economic instruments, such as fiscal instruments and internalization of environmental costs, to promote sustainable consumption, taking into account social needs, the need for disincentives for unsustainable practices and incentives for more sustainable practices, while avoiding potential negative effects for market access, in particular for developing countries. 53. Governments, in cooperation with business and other relevant groups, should develop indicators, methodologies and databases for measuring progress towards sustainable consumption at all levels. This information should be publicly available. 54. Governments and international agencies should take the lead in introducing sustainable practices in their own operations, in particular through their procurement policies. Government procurement, as appropriate, should encourage development and use of environmentally sound products and services. 55. Governments and other relevant organizations should promote research on consumer behaviour related to environmental damage in order to identify ways to make consumption patterns more sustainable.
G. Measures relating to specific areas
56. In advancing consumer interests, particularly in developing countries, Governments should, where appropriate, give priority to areas of essential concern for the health of the consumer, such as food, water and pharmaceuticals. Policies should be adopted or maintained for product quality control, adequate and secure distribution facilities, standardize international labelling and information, as well as education and research programmes in these areas. Government guidelines in regard to specific areas should be developed in the context of the provisions of this document.
Food 57. When formulating national policies and plans with regard to food, Governments should take into account the need of all consumers for food security, and should support and, as far as possible, adopt standards from the Food and Agriculture Organization of the United Nations and the World Health Organization Codex Alimentarius or, in their absence, other generally accepted international food standards. Governments should maintain, develop or improve food safety measures, including, inter alia, safety criteria, food standards and dietary requirements and effective monitoring, inspection and evaluation mechanisms. 58. Governments should promote sustainable agricultural policies and practices, conservation of biodiversity, and protection of soil and water, taking into account traditional knowledge.
Water
59. Governments should, within the goals and targets set for the International Drinking Water Supply and Sanitation Decade, formulate, maintain or strengthen national policies to improve the supply, distribution and quality of water for drinking. Due regard should be paid to the choice of appropriate levels of service, quality and technology, the need for education programmes and the importance of community participation. 60. Governments should assign high priority to the formulation and implementation of policies and programmes concerning the multiple uses of water, taking into account the importance of water for sustainable development in general and its finite character as a resource.
Pharmaceuticals 61. Governments should develop or maintain adequate standards, provisions and appropriate regulatory systems for ensuring the quality and appropriate use of pharmaceuticals through integrated national drug policies which could address, inter alia, procurement, distribution, production, licensing arrangements, registration systems and the availability of reliable information on pharmaceuticals. In so doing, Governments should take special account of the work and recommendations of the World Health Organization on pharmaceuticals. For relevant products, the use of that organization’s Certification Scheme on the Quality of Pharmaceutical Products Moving in International Commerce and other international information systems on pharmaceuticals should be encouraged. Measures should also be taken, as appropriate, to promote the use of international non-proprietary names (INNs) for drugs, drawing on the work done by the World Health Organization. 62. In addition to the priority areas indicated above, Governments should adopt appropriate measures in other areas, such as pesticides and chemicals, in regard, where relevant, to their use, production and storage, taking into account such relevant health and environmental information as Governments may require producers to provide and include in the labelling of products.
IV. International cooperation 63. Governments should, especially in a regional or sub regional context: a) Develop, review, maintain or strengthen, as appropriate, mechanisms for the exchange of information on national policies and measure in the field of consumer protection; b) Cooperate or encourage cooperation in the implementation of consumer protection policies to achieve greater results within existing resources. Examples of such cooperation could be collaboration in the setting up or joint use of testing facilities, common testing procedures exchange of consumer information and education programmes, joint training programmes and joint elaboration of regulations;
(c) Cooperate to improve the conditions under which essential goods are offered to consumers, giving due regard to both price and quality. Such cooperation could include joint procurement of essential goods, exchange of information on different procurement possibilities and agreements on regional product specifications. 64. Governments should develop or strengthen information link regarding products which have been banned, withdrawn or several restricted in order to enable other importing countries to protect themselves adequately against the harmful effects of such products.
65. Governments should work to ensure that the quality of products, and information relating to such products, does not vary from country to country in a way that would have detrimental effects on consumers.
66. To promote sustainable consumption, Governments, international bodies and business should work together to develop, transfer and disseminate environmentally sound technologies, including through appropriate financial support from developed countries, and to devise new and innovative mechanisms for financing their transfer among all countries, in particular to and among developing countries and countries with economies in transition.
67. Governments and international organizations, as appropriate should promote and facilitate capacity-building in the area of sustainable consumption, particularly in developing countries and countries with economies in transition. In particular, Governments should also facilitate cooperation among consumer groups and other relevant organizations of civil society, with the aim of strengthening capacity in this area.
68. Governments and international bodies, as appropriate, should promote programmes relating to consumer education and information.
69. Governments should work to ensure that policies and measures for consumer protection are implemented with due regard to their not becoming barriers to international trade, and that they are consistent with international trade obligations.
Comparison of the Jurisdiction Across Various Countries
Following table identifies various differences between consumer protection legislation in New Zealand, Australia, Canada, UK and USA: Issue | India | New Zealand | Australia | | | | | Definition of consumer | Buys or hires any goods for a consideration which has been paid or promised or partly paid and partly promised | Consumer definition in the CGA focuses on consumers and type and use of goods. | Consumer definition includes consumers and small business. | Prohibitions - unfair terms in consumer contracts | Unfair terms in consumer act are strictly prohibited. | No specific prohibition for unfair terms in consumer contracts. | Unfair terms in consumer contracts are prohibited in state of Victoria. | Prohibitions - unconscionable conduct | Unconscionable conduct is covered by consumer law as well as IPC. | Unconscionable conduct is covered by common law and Courts must decide if conduct is unconscionable. | Unconscionable conduct is covered by statute as well as common law. Courts must decide if conduct is unconscionable. | Industry codes of conduct | NHRC defined code of conduct to curb human right violation. | Provisions covering industry codes of practice are not in legislation. | Provisions covering industry codes in legislation and overseen by ACCC. | Enforcement - court enforceable undertakings | Enforceable by court at state and national levels. | No court-enforceable undertakings available. The Commerce Commission uses the administrative system of settlements. | At federal and state level, contravention of an undertaking can result in court action by the enforcement agency. | Enforcement - compulsory Interview | Interviews are compulsory for any person appearing in the court. | No ability to require a trader to attend a compulsory interview. | ACCC has the power to issue demands for information, including appearing before the ACCC in person. Also a requirement in some state legislation. | Enforcement - banning traders | Can be banned in case of serious trade offenders.Ex. – Plastic Ban | No ability to ban a recidivist offender. | Some states can ban traders from supplying goods and services. | Enforcement - super-complaints | Consumer complaints are handled by special consumer courts. | Consumer bodies do not have a special ability to refer consumer complaints to Commerce Commission. | Consumer bodies do not have a special ability to refer consumer complaints to ACCC. | Enforcement - product safety | Warning by direct notice and press releases. | No requirement for Product Safety Warning Notices. | Product Safety Warning Notices published in the Gazette announce when a good is under investigation for being unsafe. | Redress - defective product | A consumer who is impacted by defective product can approach consumer courts. | A person who has suffered injury from a defective product is covered by ACC. | A person who has suffered loss or damage from a defective product can take private court action. | Issue | Canada | United Kingdom | USA | | | | | Definition of consumer | Provincial definitions define consumers as non-traders. | General definitions in various statutes. Consumers are non-traders. | Law has several definitions of consumer, depending on context. If comparison is made with legislation that has provisions that are the equivalent of CGA, the consumer definition is very similar to NZ definition. | Prohibitions - unfair terms in consumer contracts | Many provincial governments prohibit unfair practices which include unfair terms in consumer contracts. | Unfair terms in consumer contracts are prohibited. | The Uniform Commercial Code (adopted by most states) prohibits terms in contracts that are unconscionable. | Prohibitions - unconscionable conduct | Unconscionable conduct prohibitions are in statute. | Unconscionable conduct is covered by common law only. Courts must decide if conduct is unconscionable. | Uniform Commercial Code prohibits unbalanced contracts, but unconscionable conduct is left to the courts to decide. | Industry codes of conduct | Provisions covering industry codes of practice are not in legislation. | Legislation allows the OFT to approve and promote industry codes. | Provisions covering industry codes of practice are not in legislation | Enforcement - court enforceable undertakings | At federal and provincial level, contravention of an undertaking can result in court action by the enforcement agency. | Contravention of an undertaking can result in court action by the enforcement agency. | Breach of a "cease and desist" order (more of an undertaking) can result in court action taken by the enforcement agency and a fine. | Enforcement - compulsory Interview | Traders voluntarily attend an interview at both federal and provincial level. | Formal interviews can be carried out, in accordance with The Police and Criminal Evidence Act 1984. | "Civil Investigative Demands" can be used to gain verbal testimony. | Enforcement - banning traders | Courts can ban individuals from trading for a period of time. | No banning provisions. | Courts have the ability to bar an individual from making claims without substantiation. Provisions appear to ban activities rather than individuals. | Enforcement - super-complaints | Consumer bodies do not have a special ability to refer consumer complaints to the enforcement agencies. | Designated consumer bodies can lodge super-complaints to the OFT. | Consumer bodies do not have a special ability to refer consumer complaints to the enforcement agencies. | Enforcement - product safety | No warning notices. Notification of warning through press releases. | No warning notices. Notification of warning through press releases. | No warning notices. Onus on companies to issue forms of notification. | Redress - defective product | A person who has suffered loss or damage from a defective product can take private court action. | A person who has suffered loss or damage from a defective product can take private court action. | A person who has suffered loss or damage from a defective product can take private court action. |
Restrictive Trade Practices Under Consumer Protection Act
“Restrictive Trade Practice” means a trade practice which tends to bring about manipulation of price or conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include—
(a) Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price;
(b) Any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services;
Unfair Trade Practices Under Consumer Protection Act, 1986
"Unfair Trade Practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely;—
(1) The practice of making any statement, whether orally or in writing or by visible representation which,—
(i) Falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
(ii) Falsely represents that the services are of a particular standard, quality or grade;
(iii) Falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
(iv) Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;
(v) Represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;
(vi) Makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
(vii) Gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof; Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;
(viii) Makes to the public a representation in a form that purports to be— a. A warranty or guarantee of a product or of any goods or services; or b. A promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;
(ix) Materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;
(x) Gives false or misleading facts disparaging the goods, services or trade of another person.
Explanation - For the purposes of clause (1), a statement that is—
(a) Expressed on an article offered or displayed for sale, or on its wrapper or container; or
(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or
(c) Contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public, shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;
(2) Permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.
Explanation — For the purpose of clause (2), "bargaining price" means—
(a) A price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or
(b) A price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;
(3) Permits—
(a) The offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;
(b) The conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;
(3A) Withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final results of the scheme.
Explanation — For the purposes of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time, published, prominently in the same newspapers in which the scheme was originally advertised;
(4) Permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;
(5) Permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.
(6) Manufacture of spurious goods or offering such goods for sale or adopts deceptive practices in the provision of services.
Consumer Protection Council:
1. The Central Consumer Protection Council —
(1) The Central Government shall, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council).
(2) The Central Council shall consist of the following members, namely:— a. The Minister in charge of the consumer affairs in the Central Government, who shall be its Chairman, and b. Such number of other official or non-official members representing such interests as may be prescribed.
2. Procedure for meetings of the Central Council —
(1) The Central Council shall meet as and when necessary, but at least one meeting of the Council shall be held every year.
(2) The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.
3. Objects of the Central Council — The objects of the Central Council shall be to promote and protect the rights of the consumers such as,— a. The right to be protected against the marketing of goods and services which are hazardous to life and property; b. Right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be so as to protect the consumer against unfair trade practices; c. The right to be assured, wherever possible, access to a variety of goods and services at competitive prices; d. The right to be heard and to be assured that consumer's interests will receive due consideration at appropriate forums; e. The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers; and f. The right to consumer education.
4. The State Consumer Protection Councils –
(1) The State Government shall, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Consumer Protection Council for (hereinafter referred to as the State Council).
(2) The State Council shall consist of the following members, namely — A. The Minister in charge of consumer affairs in the State Government who shall be its Chairman; B. Such number of other official or non-official members representing such interests as may be prescribed by the State Government. C. Such number of other official or non-official members, not exceeding ten, as may be nominated by the Central Government.
(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.
(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.
5. Objects of the State Council. — The objects of every State Council shall be to promote and protect within the State the rights of the consumers laid down in clauses (a) to (f) of section 6.
5A. (1) The State Government shall establish for every district, by notification, a council to be known as the District Consumer Protection Council with effect from such date as it may specify in such notification.
(2) The District Consumer Protection Council (hereinafter referred to as the District Council) shall consist of the following members, namely:—
(a) the Collector of the district (by whatever name called), who shall be its Chairman; and
(b) Such number of other official and non-official members representing such interests as may be prescribed by the State Government.
(3) The District Council shall meet as and when necessary but not less than two meetings shall be held every year.
(4) The District Council shall meet at such time and place within the district as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.
5B. The objects of every District Council shall be to promote and protect within the district the rights of the consumers laid down in clauses (a) to (f) of section 6.
Tie up sales:
Tie up sales means a trade practice which tends to being about manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or service in such a manner as to impose on the consumers unjustified costs or restrictions and shall include –
(a) Delay beyond the period agreed to be a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; (b) Any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be services as-condition precedent to buying, hiring or availing of other goods or services.
An analysis of above definition reveals that where sale or purchase of a product or service is made conditional on the sale or purchase of one or more other products and services, it amounts to restrictive trade practice.
Technically, this type of arrangement is called ‘tie-up sales’ or ‘tying arrangement’. The effect of such an arrangement is that a purchaser is forced to buy some goods or services which he may not require alongwith the goods or services which he wants to buy. Thus where a buyer agrees to purchase product ‘X’ upon a condition that he will also purchase product ‘Y’ from the seller, the sale of product ‘Y’ (tied product) is tied to the sale of product ‘X’ (tying product).
It is also called as restrictive trade practices which includes requiring a person to purchase or hire goods or avail services else compulsorily along with the goods he wants to have or service he wants to avail. For example, accompany has two products A and B out of which A is popular but B is not. If it is said that A will not be given unless B is also purchased e.g. forcing dealers to purchase tooth brush (which is not very popular) along with tooth paste (which is popular).
For the purposes of this Act, "restrictive trade practice" refers to an act performed by one or more persons engaged in production or distribution of goods or services which- a. In respect of other persons offering the skills, motivation and minimum seed capital required in order competing at fair market prices in any field of production or distribution reduces or eliminates their opportunities so to participate
b. In respect of other persons able and willing to pay fair market prices for goods or services, either for production for resale or final consumption reduces or eliminates their opportunities to acquire those goods or services.
2. For the purposes of subsection (1) reduction or elimination of opportunities is to be measured with reference to the situation that would retain in the absence of the practices in question.
3. Subject to exemptions set out in section 5, the practices enumerated in sections 6 to 12 are declared to be restrictive trade practices for the purposes of this Act.
4. The following trade practices are exempted from the provisions of this Act- Exemptions
a. Trade practices which are directly and necessarily associated with the exercise of exclusive or preferential trading privileges conferred on any person by an Act of Parliament or by an agency of the Government acting in accordance with authority conferred on it by an Act of Parliament. b. Trade practices which are directly and necessarily associated with the licensing of participants in certain trades and professions by agencies of the Government acting in accordance with authority conferred on them by an Act of Parliament.
Enumeration of restrictive trade practices
(1) For the purposes of this Act. Following categories of trade agreements are declared to be restrictive trade actives- Category.
(2) No agreement or arrangement belonging to a category enumerated in subsection (1) shall be enforceable in legal proceedings after the commencement of this Act nor shall any person bring a suit against any other person by reason of failure to observe or adhere to the terms of that agreement or arrangement or by reason of damages arising from that failure.
(3) An agreement or arrangement enumerated in sub section (1) shall be regarded as a restrictive trade practice for the purposes of this Act whether or not the agreement or arrangement is intended to be enforceable by legal proceedings.
(4) Where an agreement is made by a trade association the agreement shall be deemed to be made by the association and by all persons who are members of the association or represented thereon as if each of those persons were a party to the agreement.
Some of the examples of Restrictive Trade Practices are: 1. Compelling consumers to buy modem with a broadband connection. 2. Asking a person to keep some amount as fixed deposit before allotting him a locker in bank. 3. Compulsory service contract. 4. Uniform and books from school only. 5. A gas distributor instead his customers to buy gas stove as a condition to give gas connection. It was held that it was a restrictive trade practice - Re. Anand Gas RTPE 43/1983 (MRTPC).
However, where there is no such precondition and the buyer is free to take either product, no tying arrangement could be alleged even though the seller may offer both the products as a single unit at a composite price. Examples where practise held is not restrictive: In some cases, tie-up was not held as restrictive. Some examples are 1. Insistence by car manufacturer that, during the warranty period, air-conditioner can be-fitted to car only by authorised dealer to ensure that improper air-conditioner does not affect the performance of car during warranty.
2. A is a furniture dealer. He is selling Sofa at Rs. 20,000 and Bed at Rs. 15,000. He has an offer that whoever will buy Sofa and Bed both, he will charge Rs. 30,000 only. Here the choice is open to the customer to buy the products single or composite. This is not a restrictive trade practice.
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