Authored By: Devipriya Joy
Mar Gregorios College of Law
- Introduction
The Central Consumer Protection Authority (“CCPA”) assessed a penalty of Rs. 10 Lakh to Amazon Seller Services Pvt. Limited in January 2026 for permitting the posting of unapproved walkie-talkies without securing proper Equipment Type Approval disclosure responsibilities.[1] This recent enforcement action brings to light a long-standing conflict that has existed since the enactment of the Consumer Protection Act, 2019 (“the Act”) regarding whether a platform receiving a fee from each transaction and using an algorithm to arrange listings can deny accountability for transactions it facilitates.[2] The Act and the Consumer Protection (E-Commerce) Rules, 2020 (“the Rules”) create fallback liability, product liability provisions, and require a grievance redressal mechanism to each consumer transaction. However, even though e-commerce platforms in India are now generating revenues via a commission from sales, a transactional and relationships-based liability scheme has been created but there remains a reach of ambiguity for which there are no substantive consumer protections.[3]
The following paragraphs will outline the legal basis for this topic, identifying key areas of the law creating ambiguity for e-commerce consumers, and proposing several changes that align with how e-commerce platforms and their owners conduct business as well as the interactions between consumers and e-commerce platforms within the existing framework of law.
- The Legal Framework: Duties Without Adequate Teeth
The Consumer Protection Act of 2019 is a big change compared to its predecessor, the Consumer Protection Act of 1986, in that it recognizes the internet as a separate and distinct way that consumers interact with businesses. Section 94 of the Act gives the central government the power to issue regulations regarding e-commerce to make sure e-commerce is not subject to unfair trade practices. E-Commerce (E-BO) Rules 2020 were issued under the authority of Section 94 to specify how e-commerce should be conducted.[4]
Under the E-Commerce Rules, e-commerce entities will be divided into two types of entities – (1) inventory-based e-commerce entities that own and sell products directly to consumers and (2) marketplace e-commerce entities that connect and facilitate the purchase of products from third-party sellers by consumers. For example, Amazon and Flipkart are examples of marketplace e-commerce entities. Marketplace e-commerce entities are required by the E-Commerce Rules to: display the relevant information about sellers; maintain an effective grievance redressal mechanism; not manipulate prices; and remove counterfeit/unlicensed products from their platform once they have actual knowledge of those products.[5]
Most importantly, Rule 6(1)(i) establishes the fallback liability; as a marketplace entity fails to make reasonable efforts to assist the seller in fulfilling its obligations, that entity will ultimately be held liable for the seller’s failure to deliver goods and or services. Chapter VI, Product Liability of this Act will also provide under Section 86 that where a product seller sells an item and plays a role in the sale along with the ownership of the item when it is purchased through e-commerce, they will be liable for damaging a person with a defective product. Combined, these provisions are evidence of the legislative intent to create a legal framework that will support entities as they move from being purely passive intermediaries to a more active role.[6]
However, this framework is moreover undermined by its own internal structure. The Supreme Court, in Shreya Singhal v. Union of India, held that the intermediary safe harbour under Section 79 of the I.T. Act, as interpreted by the Court, will continue to be available to marketplace entities if the marketplace entity enjoys due diligence and acts with the reasonable urgency upon receipt from an entity with actual knowledge of unlawful content. This exemption in the I.T. Act provides an overall structural and economic incentive to entities to remain technically passive, while economically taking full advantage of the benefits of each individual transaction. Thus, the inability for marketplace entities to establish a defined relationship between safe harbour immunity from liability with fallback liability of the Rules constitutes the primary fault line of the current legal framework.[7]
- The Gap Between Form and Function: Key Legal Developments
In order to fully understand the evolution of legal cases involving intermediary immunity versus platform accountability, and how different jurisdictions have sought to apply this distinction—recognizing functional control of an intermediary as opposed to the formal designation—the examination of the development of case law throughout the past decade is necessary.
Prior to the enactment of the 2019 Act, the Chhattisgarh State Consumer Disputes Redressal Commission found Amazon India to be free from any liability in its decision involving the complaint against Amazon with respect to defective goods, determining that Amazon acted only as a facilitator, creating only a bilateral seller-consumer contractual relationship. In this instance, Amazon argued there was no legal connection with the purchaser of the mobile device and pointed to the fact that the terms of use specifically outlined that the contract for the sale of the device was only between the seller and the purchaser. Thus, the ruling was consistent with the traditional approach as it relates to intermediaries.[8]
The above described case was subsequently appealed before the National Consumer Disputes Redressal Commission (“NCDRC”) through a related case, namely, Amazon Seller Services Pvt. Ltd. v. Gopal Krishnan, in which the NCDRC held that while Amazon may be found to have facilitated the sale of the defective phone, it could not escape liability based solely on the fact that the seller sold the phone. The NCDRC further elaborated this concept in a later hold in Hello Travels v. Harish Jain. The NCDRC conclusively determined that facilitators bear responsibility with respect to the quality of goods provided by the sellers through their respective platforms.[9][10]
The CCPA’s 2026 enforcement action against Amazon represents the most significant recent development relating back to the actions of the seller, though it centers on the platform itself having failed to ensure products listed in an applicable category complied with CCPA regulations. In this context, the CCPA’s rationale is that earning revenue through product listings, curating those listings algorithmically, and facilitating promotional activities gives the platform enough control over the seller’s actions to trigger liability for their actions. Additionally, if a seller violates CCPA regulations, the platform cannot rely upon the intermediary defense as the violation will amount to an unfair trade practice under the CPA.[11]
These developments signal a shift from the previous regulatory and judicial model that utilized formal contract analysis for establishing liability to a new functional analysis standard for liability that measures control and benefit rather than a contractual relationship. However, the change has not yet achieved finality as it has occurred by way of enforcement discretion rather than through formal legislative amendment. The resolution of cases where there is overlap between safe harbor protection and fallback liability will hinge upon the specific evidentiary findings regarding each individual case; therefore, it can be expected that consumers will experience a level of uncertainty due to the structural nature of the resolution. As well, the grievance redressal process is further complicating the resolution of disputes, as platforms must provide consumers with an acknowledgement of their complaint within 48 hours and resolve the complaint within one month and must appoint a nodal officer, who is responsible for overseeing compliance with these obligations. However, importantly, a nodal officer who breaches any of these obligations will not be personally liable for such breach; thus, the overall deterrent impact of this system of grievance redressal is seriously undermined.[12]
- Towards a Coherent Accountability Standard
Submission: The current framework needs reforming in three areas that are interconnected. First, the current issue of conflicting provisions between safe harbours under the IT Act as interpreted by Shreya Singhal and fallback liability under the CPA must be rectified through a clear legislative amendment. The legislature must make it clear that when a marketplace earns revenue from a transaction, exercise algorithmic control over product visibility, or provide fulfilment/logistics/payment infrastructure, Safe Harbour cannot be used as defence against a consumer’s claim. The main objection to this rule, that platforms need to assure themselves that any/all products being sold by their third-party sellers are without defect and dangerous is not compelling as proportional liability protects platforms when they are held liable only in proportion to the commercial benefit derived from that third-party seller’s product. The European Union’s Digital Markets Act is a clear instruction as to how to enact the above and impose additional responsibilities on “gatekeeper” platforms, a concept that has been indefinitely recognised by Parliament, but has yet to be formed into a statute.[13]
The definition of liability under the Product Liability Act should explicitly include algorithmic recommendation systems. E-commerce platforms should have liability equal to the vendor for any defects arising out of their recommendation engine or sponsored listings if those platforms materially influenced the purchase decision.
The Personal Accountability Gap in the grievance redressal framework must be addressed. The role of a nodal officer has been established by law, however, does not carry any individual liability for the lack of compliance by an organization; therefore, the nodal officer suffers from the lack of timeliness in grievance redressal due to systemic roadblocks resulting from this legislative choice to encourage compliance. Introducing personal liability for the nodal officer based on a pattern of delays in redressal or recalcitrance in compliance behaviour rather than individual complaints of delayed redressal will allow flexibility in the institutional provision while providing an adequate deterrent effect. In the absence of such a provision, the nodal officer serves no purpose other than as an administrative function and not as a mechanism for true accountability.
The regulatory path is already supporting this direction. The CCPA’s regulatory direction (for example, through its interventionist posture as reflected in its 2026 Amazon order and in its issuance of simultaneous notices to six platforms regarding unlicensed drone and GPS jammer listings) strongly suggests that India’s consumer protection regulator has adopted (in practice) the functional accountability standard, which the statute has not yet put into law. Legislative reform must now establish a single adept enforcement framework to consolidate the enforcement actions that have already tentatively begun to occur.[14]
- Conclusion
India’s digital marketplace has been significantly advanced through the implementation of the Consumer Protection Act (CPA) 2019 and the E-Commerce Rules (ECR) 2020, both of which provide greater protections for consumers than previously existed in the country. The establishment of fallback liability, product liability provisions, and the introduction of mandatory grievance mechanisms signify a dramatic change from the previous model in which e-commerce platforms served as passive intermediaries, able to earn profits without having any liability for any harm resulting from the use of their services.
However, the current consumer protection framework still has a serious structural defect: While it gives platforms a procedural obligation to consider their role as a commercial party and take responsibility when their actions impact consumers, it does not clearly define at what point the commercial control of a platform ought to result in corresponding legal liability or accountability. Because the intermediary safe harbour continues to serve as a shield for conduct that, in practical terms, goes beyond merely facilitating transactions between buyers and sellers, it creates a situation wherein liability exists on a theoretical basis but in many instances may be almost impossible to enforce.
The development of statutory clarification concerning safe harbor immunity and fallback liability, extensions of product liability to algorithmic commercial conduct, and an introduction of personal responsibility for product liability embedded in the grievance redressal mechanism would create a framework sufficient to address the demands of modern commercial conduct via platforms. The CCPA’s recent enforcement posture indicates a regulatory will exists. The legislative framework must now be constructed to reflect this regulatory will.
- Reference(S):
Primary Sources
Consumer Protection Act, No. 35 of 2019 (India).
Consumer Protection (E-Commerce) Rules, 2020, G.S.R. 496(E) (July 23, 2020) (India).
Information Technology Act, No. 21 of 2000 (India).
Amazon Seller Services Pvt. Ltd. v. Gopal Krishan, Revision Petition No. 2413 of 2016 (NCDRC 2016) (India).
Hello Travels v. Harish Jain, Revision Petition No. 1214 of 2017 (NCDRC 2017) (India).
Shreya Singhal v. Union of India, (2015) 5 SCC 1 (India).
CCPA, Suo Motu Proceeding Against Amazon Seller Services Pvt. Ltd., Order (Jan. 15, 2026).
CCPA, Notices to Six E-Commerce Platforms (Feb. 20, 2026).
Secondary Sources
Standing Committee on Commerce, 16th Report on E-Commerce, Lok Sabha (2021–22) (India).
Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on Contestable and Fair Markets in the Digital Sector (Digital Markets Act), 2022 O.J. (L 265) 1.
Mondaq, Accountability of E-Commerce Platform: Legal Lessons from the CCPA’s Order Against Amazon and Snapdeal (Apr. 2026), https://www.mondaq.com.
Indus Law, Key Facets of the Consumer Protection Act, 2019 and E-Commerce Rules (July 2020),
[1] CCPA, Suo Motu Proceeding Against Amazon Seller Services Pvt. Ltd., Order (Jan. 15, 2026).
[2] Consumer Protection Act, No. 35 of 2019 (India).
[3] Consumer Protection (E-Commerce) Rules, 2020, G.S.R. 496(E) (July 23, 2020) (India).
[4] Consumer Protection Act, No. 35 of 2019, § 94 (India); Consumer Protection (E-Commerce) Rules, 2020, G.S.R. 496(E) (July 23, 2020) (India).
[5] Consumer Protection (E-Commerce) Rules, 2020, G.S.R. 496(E), rr. 4–6 (July 23, 2020) (India).
[6] Consumer Protection (E-Commerce) Rules, 2020, G.S.R. 496(E), r. 6(1)(i) (July 23, 2020) (India); Consumer Protection Act, No. 35 of 2019, § 86 (India).
[7] Shreya Singhal v. Union of India, (2015) 5 SCC 1 (India); Information Technology Act, No. 21 of 2000, § 79 (India).
[8] See Chhattisgarh State Consumer Disputes Redressal Comm’n, Complaint Against Amazon India (defective goods) (pre-2019) (India) (Amazon held not liable as mere facilitator).
[9] Amazon Seller Servs. Pvt. Ltd. v. Gopal Krishan, Revision Petition No. 2413 of 2016 (NCDRC 2016) (India).
[10] Hello Travels v. Harish Jain, Revision Petition No. 1214 of 2017 (NCDRC 2017) (India).
[11] CCPA, Suo Motu Proceeding Against Amazon Seller Services Pvt. Ltd., Order (Jan. 15, 2026); Consumer Protection Act, No. 35 of 2019, §§ 2(47), 88 (India).
[12] Consumer Protection (E-Commerce) Rules, 2020, G.S.R. 496(E), rr. 7–8 (July 23, 2020) (India) (prescribing 48-hour acknowledgement and one-month resolution timelines and mandating appointment of a nodal officer).
[13] Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on Contestable and Fair Markets in the Digital Sector (Digital Markets Act), 2022 O.J. (L 265) 1; Standing Committee on Commerce, 16th Report on E-Commerce, Lok Sabha (2021–22) (India).
[14] CCPA, Notices to Six E-Commerce Platforms (Feb. 20, 2026).
