Central Consumer Protection Authority (CCPA)

The Central Consumer Protection Authority (CCPA) is a regulatory body in India that safeguards consumer rights, prevents unfair trade practices, and ensures fair marketplace standards.

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Context: The Central Consumer Protection Authority (CCPA) has imposed a ₹10 lakh fine on ride-hailing platform Rapido for running misleading advertisements and unfair trade practices, and has directed the company to refund affected customers.

Central Consumer Protection Authority (CCPA)

Central Consumer Protection Authority is a regulatory authority set up in 2020 under Section 10(1) of the Consumer Protection Act, 2019
Nodal Ministry: The Ministry of Consumer Affairs, Food and Public Distribution.
Objective: To promote, protect and enforce the rights of consumers as a class.
Timeline: The 2019 Act replaced the 1986 Act, notified on 9th August 2019, and enforced from 20th July 2020.

Composition

The CCPA is led by a Chief Commissioner, with two commissioners overseeing goods and services, respectively.
An Investigation Wing, headed by a Director General, forms part of the CCPA.
Additionally, District Collectors are empowered to probe consumer rights violations, unfair practices, and deceptive advertising.

Term of Office

The Chief Commissioner and Commissioner serve a term of five years from their start date or until reaching 65 years of age, whichever comes first. They are eligible for reappointment.

Qualifications

Qualifications for Chief Commissioner: Candidates must have at least 25 years of professional experience and be knowledgeable in fields like law, public affairs, administration, economics, business, commerce, industry, finance, management, technology, advertising, public health, medicine, food, product safety, standardisation, quality management, or other relevant areas.
Qualifications for Commissioner: A minimum of 20 years of professional experience is required in similar fields as mentioned for the Chief Commissioner. The person should also demonstrate ability, integrity, and standing.

Powers And Functions of CCPA

The CCPA has the authority to independently inquire into or investigate consumer rights violations and unfair trade practices, act on complaints, or follow central government directives.
It can mandate the recall of goods or cessation of services deemed hazardous.
The authority is empowered to order refunds for recalled goods or services and to halt unfair practices detrimental to consumer interests.
For false or misleading advertisements, the CCPA can impose penalties of up to ₹10 lakh and a two-year imprisonment for first offenders, escalating to ₹50 lakh and five years for repeat offences.
Endorsers of such deceptive ads may face a ban on endorsements for up to one year, extending to three years for subsequent violations.
The CCPA can file complaints against violations of consumer rights or unfair practices with District, State, or National Consumer Disputes Redressal Commissions.

Consumer Protection Act, 2019

The Consumer Protection Act of 2019, replacing the 1986 Act, aims to empower consumers through enhanced trade transparency.
Key consumer rights: They include protection against hazardous goods and services, the right to be informed about product details, access to a variety of goods and services at fair prices, redressal against unfair trade practices, entitlement to adequate compensation, and the right to consumer education.

Significant features of the Act

Establishment of consumer protection councils at the national and state levels to safeguard consumer rights.
Mandatory display of country of origin by all e-commerce entities.
Setting up Consumer Disputes Redressal Commissions (CDRCs) at the district, state, and national levels.
Introduction of product liability, holding manufacturers or sellers accountable for harm caused by defective products or services.
Penalties for the manufacture or sale of defective or adulterated goods, including licence suspension for up to two years upon first conviction and potential permanent cancellation for subsequent offences.

Ethical Issues of Such Advertisements

Deception: Misleading consumers with false promises → violates the right to informed choice.
Exploitation of Trust: Using celebrities/influencers to mislead consumers into unsafe or overpriced choices.
Unfair Advantage: Companies gain unfair market power by tricking buyers instead of fair competition.
Harm to Consumers: Financial loss, safety risks, disappointment → especially vulnerable groups (elderly, students, poor).
Erosion of Consumer Confidence: Misleading ads reduce trust in brands and the overall market.
Moral Responsibility: Companies should focus on truthful transparency, not exploitative persuasion.

Legal Framework for Misleading Advertisements in India

Consumer Protection Act, 2019
- Defines misleading advertisement.
- Empowers the CCPA to impose penalties, order discontinuation, and ban endorsers.
Cable Television Networks (Regulation) Act, 1995
- Prohibits misleading/false ads on cable TV.
Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954
- Restricts misleading medical/health-related ads.
Food Safety and Standards Act, 2006
- Penalises false claims in food advertisements.
Legal Metrology Act, 2009
- Regulates misleading packaging and labelling practices.
ASCI (Advertising Standards Council of India) Guidelines (self-regulation)
- Voluntary code ensuring ads are honest, not offensive, and do not exploit consumers.