Are mobile app-based e-commerce platforms subject to the same legal obligations as website-based platforms?

With the growth of mobile commerce, many e-commerce platforms have shifted focus from traditional website-based models to mobile apps, offering a more seamless and user-friendly experience for consumers. However, this shift raises questions about whether mobile app-based e-commerce platforms are subject to the same legal obligations as their website-based counterparts. In India, both types of platforms must adhere to various consumer protection and regulatory laws, but there may be nuances in their application depending on the platform type.

Legal Obligations for E-Commerce Platforms in India

• Consumer Protection Laws

  • Consumer Protection Act, 2019: The Consumer Protection Act applies equally to both website-based and mobile app-based e-commerce platforms in India. Both platforms must ensure fair trade practices, clear product information, and transparent return policies. They are also responsible for providing appropriate grievance redressal mechanisms, including Consumer Protection Councils and National Consumer Helplines.
  • Unfair Trade Practices: Both app-based and website-based platforms must avoid unfair trade practices such as deceptive advertising, misrepresentation of products, and false claims, as these apply equally across different digital platforms.

• Data Privacy and Protection

  • Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011: These rules apply to both mobile apps and websites when handling user data. They mandate that platforms take reasonable steps to protect users' personal data, including secure processing, storage, and transfer of data.
  • Personal Data Protection Bill (PDPB): Though still under debate in India, the PDPB aims to regulate the collection, processing, and storage of personal data. Once enacted, this law will apply uniformly to both mobile app-based and website-based e-commerce platforms, with provisions for data subject rights, transparency, and consent.

• Advertising and Misleading Claims

  • Advertising Standards Council of India (ASCI) Guidelines: These guidelines apply to all digital platforms, including mobile apps and websites. Influencer marketing, false claims, or misleading advertisements on both mobile apps and websites are subject to ASCI's oversight. The guidelines ensure transparency in paid promotions and require clear disclosures.
  • Consumer Protection Act, 2019: Under this Act, both app-based and website-based platforms must refrain from deceptive advertising and misrepresentation of products. For example, misleading discount offers, exaggerated product claims, or fake reviews are prohibited on both types of platforms.

• Product Authenticity and Counterfeit Goods

  • Both app-based and website-based platforms are required to ensure that products sold are genuine and not counterfeit. Platforms like Amazon, Flipkart, and Myntra must monitor their sellers and ensure that the products sold comply with intellectual property rights.
  • Trade Marks Act, 1999: The Trade Marks Act holds both mobile app and website platforms accountable for the sale of counterfeit goods. The liability applies to both types of platforms if counterfeit products are sold without due diligence.

• Dispute Resolution and Grievance Redressal

  • Both types of platforms must provide a clear and accessible mechanism for consumer complaints. This includes acknowledging grievances, offering timely resolutions, and ensuring refunds or replacements where applicable.
  • The Consumer Protection (E-Commerce) Rules, 2020 also specify that e-commerce platforms, regardless of whether they operate as mobile apps or websites, must appoint a grievance redressal officer to address consumer issues. They must respond to complaints within a specific time frame (usually 1-2 weeks).

• Key Differences in Regulation and Implementation for Mobile Apps and Websites

  • Platform-Specific App Rules (Mobile Apps)

    • App Store Guidelines: Mobile apps are subject to additional regulations imposed by Google Play Store and Apple App Store. Both platforms have strict rules for apps that sell products or services, including requirements for secure payment processing, clear refund policies, and consumer privacy protections.
    • For example, Google Play Store and Apple App Store require e-commerce apps to clearly disclose product details, including costs, shipping times, and any additional charges, ensuring compliance with both Indian consumer protection laws and international app store policies.

  • Mobile App-Specific Features

    • Location-Based Services and Data Tracking: Mobile apps often use location-based services, push notifications, and data tracking more intensively than websites. These features raise additional concerns regarding data privacy and user consent, which mobile apps must handle more carefully.
    • For instance, geolocation tracking on a shopping app could be used to provide customized promotions based on the user’s location. However, this practice must adhere to the Data Privacy laws (such as the PDPB once enacted) and seek user consent for such data collection.

  • UI/UX Guidelines for Apps

    • Mobile apps are expected to follow user experience (UX) guidelines provided by the platform (such as Apple or Google). These guidelines require apps to provide smooth, easy-to-navigate interfaces for users to make purchases. Legal obligations related to accessibility and easy returns are enforced both by the platform and government regulations.
    • The Consumer Protection (E-Commerce) Rules, 2020 mandate that both app-based and website-based platforms must facilitate easy returns and exchanges, but the implementation may vary slightly due to the platform’s interface and mobile-specific design.

  • Updates and Security Patches

    • Mobile apps need to be updated regularly for security patches and bug fixes, especially since they are directly installed on users' devices. Failing to implement timely updates could lead to vulnerabilities in payment processing or consumer data protection, exposing platforms to legal liability.
    • Websites also need to maintain robust cybersecurity measures, but they do not face the same issues regarding regular updates as mobile apps do. However, e-commerce sites still face scrutiny for failing to protect consumer data or providing outdated versions of security protocols.

• Judicial Trends and Enforcement

  • Increasing Scrutiny of Mobile Apps and Websites: Indian courts have been applying Consumer Protection Act, 2019 and Information Technology Act, 2000 equally to both mobile and website platforms. In cases where platforms, whether apps or websites, engage in deceptive practices or data breaches, both have been penalized similarly.
  • For example, the National Consumer Disputes Redressal Commission (NCDRC) has ruled in favor of consumers in cases where mobile apps and websites were found guilty of selling defective or counterfeit products or failing to address consumer complaints effectively.

• E-Commerce Rules 2020

  • The E-Commerce Rules 2020, part of the Consumer Protection Act, 2019, specifically require both mobile app-based and website-based platforms to appoint grievance officers, maintain transparency regarding product prices and authenticity, and ensure consumer rights protection.

• Example Case

  An online fashion store operates both a mobile app and a website, selling clothing products. The app and website both promote a limited-time sale with heavy discounts, but consumers find the quality of the products to be substandard and not as advertised.

  Steps Taken by the Court

  • Consumer Protection Act: The consumers file complaints under the Consumer Protection Act, claiming false advertising and misleading claims on both the mobile app and the website.
  • Grievance Redressal: The court mandates that both the app and the website offer full refunds, correct misleading information, and take down the deceptive sale offer.
  • Compensation: The court awards compensation to the affected consumers for emotional distress caused by the misleading advertisements on both platforms.

Conclusion

In India, mobile app-based and website-based e-commerce platforms are subject to the same legal obligations under consumer protection laws, data privacy regulations, and advertising guidelines. The primary differences arise from platform-specific rules, such as app store policies, and how user data is collected or processed. However, in terms of legal responsibility, both types of platforms must adhere to the Consumer Protection Act, Information Technology Act, and other relevant laws to protect consumers from fraudulent practices, data breaches, and misleading advertisements.