This article has been written by Ashmita Biswas and Tanvi Goyal from Nirma University.
The pandemic has forced upon us many habits. One such habit is online shopping. Unlike the other industries, the e-commerce industry has profited and expanded as an outcome of the pandemic. But as the saying goes ‘Too much of anything is harmful’. The increased investment of citizens in the e-commerce industry has increased cybercrime thus, highlighting the loopholes in the Indian cybercrime laws.
Laws relative to e-commerce (in India) are expressed in ‘Information Technology Act, the Copyright Act and recently in the Consumer protection Act. In this article, we have discussed the above-mentioned laws after dividing them into tort, contract, intellectual property rights, and dispute resolution laws.
This helped us understand individually, the problems that each law faces (in terms of e-commerce laws) and hence, deal with each problem with more efficiency and proximity. This article also throws light upon the recent amendments made in e-commerce laws and experiments the validity of these laws. This article helped us understand that cybercrime mostly occurs due to the vague and unclear nature of some of the e-commerce laws. The other reason is that very few of these laws are known by the public and due to the size of the internet it is very difficult to control and know of each activity that takes place within it. Due to this much of these cybercrimes go unreported hence, unnoticed. Although amendments have been made to the law, it has not been able to completely eliminate these problems leaving a large scope for improvement in e-commerce law.
E-commerce is the buzzword of the modern-day. Customers are switching to online outlets to shop for groceries, everyday essentials, and other commodities since they are facing lockdown regimes and store closures. According to a Neoteric study published in an article, COVID-19 caused a double-digit percentage of online consumers to purchase more digitally. During the lockdown, the majority of them used the online mode for the very first time. Traditional shopping and payment methods are changing as a result of the coronavirus pandemic. “Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. It also pertains to “any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.”
The major different types of e-commerce are Business-to-business (B2B), Business-to-consumer (B2C), Business-to-government (B2G), Consumer-to-consumer (C2C). Electronic commerce and the Internet have unparalleled opportunities for boosting economic growth, job prospects, and overall quality of life. However, much like offline trade, online trading presents opportunities for deceptive, misleading, and unethical business practices.
As a result, being mindful of the regulatory restrictions that apply when transacting on an ecommerce website is critical. Because of the uncertainty surrounding the regulatory system, customers may be hesitant to buy goods or services over the Internet, and businesses may be hesitant to enter the electronic industry.
Any contract created in the course of e-commerce by the interaction of two or more entities using electronic means, such as e-mail, the interaction of a person with an electronic agent, such as a computer programme, or the interaction of at least two electronic agents that are designed to understand the nature of a contract is referred to as an e-contract. Principles of traditional contracting and remediation also apply to e-contracts. An e-contract is a tool for drafting and negotiating effective contracts for e-commerce and related services for consumers and businesses. It is intended to aid citizens in e-businesses in formulating and applying commercial contract policies. Which includes sample contracts for the selling of goods and the provision of digital goods and services to customers and enterprises. The Supreme Court of India confirmed the legality of an unregistered and unsigned contract negotiated by email in Trimex International FZE vs. Vedanta Aluminium Limited, India 2010, affirming the enforceability of e-contracts.
Types of online contracts
The most common forms of e-contracts are clickwrap, browsewrap and shrinkwrap contracts.
- Click wrap contract: – The party’s positive acceptance is obtained in click wrap contracts by checking a ‘I agree’ tab with a scroll box that allows the approving party to see the terms and conditions.
- Browse wrap contract: – In the case of a browse wrap contract, the negotiating party is bound by the terms simply by using (or browsing) the page.
- Shrink wrap contract: – Contracts of shrink wrap are boilerplate deals, licencing agreements, or other terms and conditions that are bundled with the products. The consumer’s approval of the contract is determined by his or her use of the commodity.
Essentials of a valid contract vis-à-vis an electronic contract
- Offer: – As in every other situation, an offer to form an e-contract must be made. However, in a number of purchases (whether online or offline), the offer is not made one-on-one. The customer ‘browses’ the vendor’s website for available products and services before ‘choosing’ which ones he wants to buy.
- Acceptance: – Acceptance of the proposal is needed. Since the customer has made an offer in response to the invitation to treat, the business/vendor is more often than not responsible for accepting it. Before approval, the proposal is irrevocable at any point in time.
- Lawful consideration: – A legal consideration is needed. To be legally enforceable, any electronic agreement must have a lawful consideration.
- Intention to create legal relations: – There must be a need to establish legal ties. If the parties do not want to enter legal partnerships, no contract can be formed between them. Domestic or social relationships are not contracts, and as a result, they are not enforceable.
- Competency of the parties: – Both the contracting parties must be legally capable of entering into a contract. Agreements made by inept people, such as minors, lunatics, insolvents, and so forth, are null and void.
- Free consent: – There must be real and unrestricted consent. When consent is obtained without coercion, misrepresentation, improper force, or fraud, it is said to be free. In other words, no party to the deal must be forced to enter into the contract against their will. In general, in online contracts, particularly where there is no active contact between the negotiating parties, such as between a website and the consumer who purchases through it, the ‘click through protocol’ guarantees free and legitimate consent.
- Lawful object: – The contract’s purpose must be legal. The legality of the contract’s purpose is presupposed by the contract. As a result, any deal to distribute narcotic products or pornographic films over the internet is null and void.
- Certainty and possibility of performance: – There must be both assurance and the probability of success. To be enforceable, a contract must not be undefined, unclear, or contradictory, and it must be possible to execute it. A deal that cannot be fulfilled is invalid, such as one in which a website agrees to sell property on the moon. Similarly, an arrangement whose value is not certain or worthy of being determined should be avoided.
Legality of e-contracts under the Indian Technology Act, 2000
The Information Technology Act of 2000 (the “IT Act”) governs contractual elements of electronic record use, including attribution, acknowledgement, dispatch time and location, and reception. However, because the IT Act is just an enabling Act, it must be viewed in connection with the Indian Contracts Act of 1872. (“Contract Act”). The Contract Act requires three key factors for the formation of every contract. There must be an offer, which must be accepted without alteration, and there must be some kind of remuneration for the contract. E-contracts would benefit from these elements. However, a challenging legal question frequently arises: How can we know if the offeree has ACCEPTED the offer? Furthermore, unlike traditional modes of communication, Internet communication does not include a direct channel of connection between the sender and receiver of e-mail. During the delivery process, the message is split up into pieces. This creates questions about the precise timing of acceptance of communication, as this is crucial for determining the parties’ rights. Section 13 of the IT Act specifies techniques for identifying the precise time and location of e-mail dispatch and reception.
Benefits of e-contracts over traditional contracts
- In general, an e-contract system aids in the transition from a paper-based system to an electronic system for contract formulation. It’s more transparent, and it’s faster. The e-contract approach is straightforward and efficient, reducing the burden on the parties. These contracts have a low level of risk. It also reduces costs.
- An e-contract system can also be used for electronic bookkeeping, authorisation, notifications, and tracking. Producers improve the quality of their products in this form of contract in order to compete in a competitive market. As a result, e-contract enactment systems may be utilised to administer even the most complicated e-government contracts. As a result, e-contract enactment systems may be utilised to administer even the most complicated e-government contracts.
Issues involved with e- contracts
- Privacy: – A huge quantity of personal information is collected while making an online purchase, including the user’s identity, hobbies, browsing patterns, and financial information. This might result in two main privacy concerns: data abuse and unauthorised access to sensitive data.
- Security of systems: – Since confidential information such as passwords, personal information, and so on is stored on the servers of e-commerce firms, the protection of such information becomes critical. This security risks may be external (from hackers, malware, and Trojan horses) or internal (from inside the organisation).
- Improper acceptance: – There are questions about whether an individual is bound by the terms of a contract without even reading it or being able to discuss them. For example, website XYZ.com allows users to subscribe to its newsletters by merely entering their name and e-mail address on the form given and then pressing the ‘SUBSCRIBE’ button after reading and subscribing to the Subscriber’s Contract’s terms and conditions. Now an important question arises, would this can amount to a contract with XYZ?
- Online Identity: – Internet transactions, particularly those involving customers, often occur between strangers, raising concerns about the person’s identity as well as his or her power, authority, and competence to join the contract.
- Consumer Protection: – In e-contracts, the consumer has a very low bargaining power. In the conventional market, the customers’ position and keep is very strong and up to par. E-contracts typically have business-oriented terms and conditions. In the E contracts, consumers are not considered to be of equal worth. When conflicts arise, the courts favour the terms and conditions of the internet agreement, and clients are the ones that are least protected from lawsuits, even though the case is resolved. This has given rise to the problem of consumer protection. As a result, the issue of customer rights has arisen. In 1986, the Consumer Rights Act was enacted. The trading structure has improved dramatically since then. Since this Act has gaps in current consumer law, the recent Consumer Protection Bill has made several amendments, such as changing the concept of “consumer.” “Sec.2 (8) Explanation (b) it has the expression “buys and goods” and “hires or avails any services” include the transaction made through any modes inclusive of but not limited to offline through electronic means.”
E-commerce analysed using Tort Law
The word tort is derived from the Latin word ‘tortum’ meaning twisted. In law, it implies conduct that is twisted. If expressed legally, it is a breach of some duty independent of contract, giving rise to a civil cause of action for which compensation is recoverable.’  The E-commerce service is vehemently used by civilians especially during the recent pandemic. This creates space for many wrongful civil causes. Therefore, it is important to understand the various legal actions taken to protect civilian rights. This section will explain how tort law is induced into the legal functioning of E-commerce to protect civilian rights.
Tort offences and claims in e-commerce
Defamation: Cyber defamation occurs when negative and untrue material against a person is published into the public domain. Such publications can be made over the Global Web, through group discussions, or emails. The liability of publishing such material may fall either on the primary publisher (e.g. web site content providers, e-mail authors, etc.) or secondary party (internet service providers or bulletin board operators).
The punishment for the same is mentioned under Section 66 A of the IT Act 2008 (sending offensive messages through communication services, causing insult, injury, or criminal intimidation. Origin of such messages shall be punishable with imprisonment for a term which may extend to three years and with fine), Section 499 (punishment of defamation as imprisonment for up to two years and/or with fine), Section 469 (whoever commits forgery, intending that the document or electronic record forged shall harm the reputation of any party, or knowing that it is likely to be used for that purpose shall be punished with imprisonment of either description for a term which may extend to three years and shall also be liable to fine), Section 501(printing or engraving matter known to be defamatory is also an offense and attracts punishment) and Section 503 (offense of criminal intimidation by use of emails and other electronic means of communication) of the IPC.
Even though there are so many legal repercussions regarding Cyber Defamation, the law still seems to struggle to contain Cyber Defamation.
In a country like India where major crimes such as murder, rape and theft are increasing with every passing day, crimes such as defamation is only taken seriously if it involves a famous person. Thus, the law is either not taken seriously or the public is unaware of such laws. Analysis of this section has helped me understand that, although there are many laws governing defamation these laws are not connected and widely spread out, creating space for misconception and confusion.
Privacy: While creating an account on any e-commerce website, access to data within your phone is demanded. Denial of access to any of this usually led to the inability of the consumer to operate the website. Much data that is collected by these methods are personal and often given due to the lack of any other option for the consumer.
This lack of option does not only result from restricted entry into the website but, may also, come in the form of lengthy terms and condition sheets. These terms and conditions usually end with only an ‘I Agree’ button at the end, depicting that to use this site, the consumer has no choice but to agree to the companies’ terms and conditions.
Besides that, the lengthy and boring formatting of these terms and conditions often prevents readers from going through them (especially cause, most consumers use these websites during their leisure time hence, such tasks may seem exhausting.) As a result, consumers tend to give access to the E-commerce website into their personal details such as user’s identity, preferences, patterns of search, and financial information.  Even if the consumer successfully navigates the complete site, there is no means by which the consumer can negotiate unappreciative terms and conditions with the vendor. He is hence, left with no choice but to submit to the terms and conditions mentioned. This raises questions as to the validity of consent taken by these e-commerce sites. 
In the IT Act 2000, Section 72, which (penalty for breach of confidentiality and privacy) and Section 67 (publication of obscene information in electronic form). This Act was then Amended to form IT Act 2008, here Section 66E (discussed punishment for violation of privacy), Section 67(punishment for publishing or transmitting obscene material in electronic form), Section 67A (punishment for publishing or transmitting of material containing the sexually explicit act, etc. in electronic form), Section 67B (punishment for publishing or transmitting of material depicting children in the sexually explicit act, etc.., in electronic form) and Section 72 A (speaks of punishment for disclosure of information in breach of lawful contract).
Along with these Privacy laws, the IT Act 2008 also, states a few data protection laws to ensure safety. They are Section 43A (compensation for failure to protect data). The Data Protection Act, 2011 further provided a guideline for security practices and procedures and sensitive personal data to protect data in India. The Data Protection Rules also set guidelines and compliances for the body corporate or any person on its behalf handling SPDI, regarding the transfer, collection, disclosure of information, and reasonable security practices and procedures to protect it. 
The issue of privacy is so essential because after the People’s Union of Civil Liberties vs. the Union of India, 1997, the Supreme Court had decided that ‘Right to Privacy’ would fall under the ‘Right to life and personal liberty’ which is a Fundamental Right. As the fundamental right of a citizen falls within the basic constitution of India and cannot be denied to Indian citizens, these E-commerce companies are violating this right, by reasoning that through, their lengthy terms and condition they have taken permission for the same, which is unethical and a concrete reason for avoidable contract on the wish of the consumer.
India is a collectivistic country which means that we derive our happiness from society and not from within ourselves. Therefore, although the laws of privacy are strict and directly linked to a fundamental right, the law still fails to address the strict implication of this law. The law should be expressed in such a manner that it directly addresses the collective nature of our country, and why invasion of one’s privacy is incorrect and thus, a crime. The main problem with this law is that it fails to educate Indians about evolved concepts (because of traditional beliefs of Indian culture) and rather forces the implication of the law upon them.
Intermediary Liabilities: Under Section 2 of the IT Act, 2008, intermediary with respect to any electronic records, means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-marketplaces and cyber cafes.
Problem for intermediaries that lead to the above-mentioned change
- After receiving a notice regarding the third-party content, intermediaries are given a very short period (36 hours for first reaction) to make things right. This is because of the sensitive nature of the information shared by the third-party, which could be very harmful to someone’s reputation.
- If the notification is unclear or unjustified this can put intermediary in a dilemma to decide whether it is right or wrong.
- The Copyright Act 2012 mentions transmission of content of third-party with relevance to intermediaries. However, the vague and unclear interpretation of this law creates opportunity for cyber criminals to find loopholes within the law.
Case: Super Cassettes Industries Ltd. Vs. Myspace Inc. and Anr. 
In this case, Super Cassettes (a T-series song producing company) was the plaintiff and Myspace Inc a social media platform, which operates through permitting customers to add content material, and examine content material published through different customers.) was the defendant.
The plaintiff alleged that Myspace changed into infringing its copyright through permitting infringing copies of their material to be published at the Myspace platform. The plaintiff approached the Delhi High Court and filed a suit looking for injunctive comfort and damages. The issue concerned, whether Myspace can be held liable for a post by a third party on their platform?
Arguments made by the plaintiff
- Infringing copies of several of its works were available on the Myspace platform.
- That Myspace was aware of such infringing material.
- That Myspace was guilty of primary infringement of the plaintiff’s copyrights.
Arguments made by Myspace
- The content on Myspace was user generated and they, had no control over the same.
- The terms in its user agreement restricting users from posting infringing content could not be held to mean that Myspace was aware of specific instances of infringement.
- Although Myspace did take a limited license from its users to modify the content, such modification was limited only to an automated process of inserting advertisements.
- Myspace had rights management and notice and takedown processes, which the plaintiff could use to protect its rights.
Important Sections mentioned
Section 51(a)(ii) of the Copyright Act, 1957 (Copyright Act): Copyright is infringed when any person “permits for profit any place to be used for the communication of the work to the public where such communication constitutes an infringement of the copyright in the work”. However, an exception is provided, where the person was not aware and had no reasonable ground for believing that such communication would be an infringement.
Section 79 of the Information Technology Act, 2000 (IT Act): Intermediary will be provided with a safe harbour, and not held liable for third party content if:
- The intermediary does not initiate the transmission of content.
- The intermediary does not select the receiver of the transmission.
- The intermediary does not modify the content.
- The intermediary undertakes certain due diligence requirements as prescribed.
It further states that to be exempted from liability the intermediary must remove or disable access to the content when it becomes aware that the content is unlawful.
Section 81 of the IT Act: Nothing in the IT Act will restrict any person from exercising rights granted under the Copyright Act.
The initial order of the Delhi High Court stated that Myspace to, among other things will ensure:
- That no works owned by T-Series would be uploaded on its platform without making enquiries as to ownership / rights to the work.
- That as and when the T-Series informed Myspace of any of its works available on the Myspace platform, such work is removed within 1 week of receiving such notice.
This order was seen as a cause for concern, not just for Myspace but for all social media platforms and intermediaries, as well as civil liberties such as the right to free speech. The order had formed a major dent in the protection of internet-based businesses and intermediaries (effecting the fundamental right to practice a profession). Keeping this concern in mind, the Delhi High court recently has reversed its previous order. 
As it came to the knowledge of lawmakers that third party intervention was what caused all the problems. This led to the creation of Section 79 of the IT Act which mentions an intermediary is not liable for any third-party content hosted/made available through such intermediary under certain circumstances. An e-commerce company can pre-empt any liability arising by virtue of providing a platform for third parties, by following these guidelines. 
Negligence: Negligence if seen from a legal perspective, signifies the failure to exercise a standard of care which the doer as a reasonable man should have exercised in a particular situation. 
As mentioned above, due to the Covid-19 pandemic, the e-commerce industry has almost become a form of monopoly. Therefore, these companies tend to get away with many forms of negligent acts such as delayed delivery, unanswered query, incomplete information of products or untrue information of products, etc.
The negligence of this industry is treated by the Consumer Protection Act. This Act ensures that all producers succumb to the duty of care they owe to their consumers. Witnessing the threats that the monopolistic behaviour of the e-commerce industry imposes on society, new reforms have been made to this act as of 2019.
- Consumer defined: As per the provisions of the 2019 Act, a person who purchases any goods or any services through any of the online platforms will be treated as a consumer for the purpose of the Act and will be able to claim protection and seek remedies under the Act.
- Producer defined (Electronic service provider) defined: The online marketplaces and the online auction sites have been expressly brought under the ambit of this definition. Such electronic service providers will have the same duties, responsibilities, and liabilities as that of a Product Seller under the 2019 Act. Further the manufacturers who sell their products directly and exclusively through their own websites or through the online market platforms have also been brought within the definition of a product seller.
- Unfair Trade Practice: Disclosure of personal information (of consumers) to any other person except in accordance with the provisions of any law for the time being.
- File complaint: Permit the consumers to file complaints with the jurisdictional consumer forum located at the place of residence or work of the consumer. Making communication of issues more convenient for consumers.
- Notice: a notice shall be considered as valid if the same is served on an electronic service provider at the address provided by it on the electronic platform from where it provides its services as such.
- Draft rule:
- Inventory model: Where inventory of goods and services is owned by e-commerce entities and is sold to the consumers directly.
- Market model: Provides an information technology platform by an e-Commerce entity on a digital & electronic network to act as a facilitator between buyer and seller or rather as an intermediary.
As per these Rules, every e-commerce entity 25 who carry out e-commerce business in India is required to display the details about the sellers supplying the goods and services in their websites. The details of the sellers including identity of their business, legal name, principal geographic address, name of the website, e-mail address, contact details, including clarification of their business identity, the products they sell, and how they can be contacted by consumers should be published on the website of the e-commerce entity.
- Misrepresentation: The onus has been put on the e-commerce entities to ensure that the sellers are not making any misrepresentations or misleading comments or any other unfair or deceptive practices in relation to the features of the goods and services offered through their platforms. They are also required to monitor the product reviews to ensure that the sellers themselves are not posting any reviews posing as the customers.
- Maintain transparency: The Rules itself stipulate that the breakup price for the goods and services offered under the online platforms should be provided by the sellers, including the charges for delivery, conveyance, taxes etc. The sellers are required to disclose to the consumers their Policies related to shipping of goods, exchange, returns and refund processes to ensure their accountability towards their consumers. The Rules have made the sellers responsible for any warranty/guarantee obligations with respect to the goods and services sold.
- Lack of conformity: The common grievances of the consumers in relation to the digital content or services are that they receive wrong or faulty digital content or digital services, or they are not able to access the digital content or digital service in question.
- Nuisance: Nuisance under the IPC is defined as ‘any common injury, danger or annoyance to the people in general who dwell or occupy the property, in the vicinity, or which must necessarily cause injury, obstruction, danger or annoyance to the people who may have occasion to use any Public Right.’
If related to e-commerce, nuisance is caused by either the spamming of an individual’s mail, in the name of advertisement or a reluctant long time taken in delivering orders.
Delivery of promotion mails in an individual’s personal mail, not only invades privacy but, also may be the reason of annoyance to an individual. Such promotion may cause a loss, if due to the overdose of such mails, an individual misses out on an important mail, that would have in some way benefited the individual.
Although the IT Act 2008 does not directly mention anything about spam mails, they do indirectly address the issue under Section 66 A (sending of menacing, annoying messages, and misleading information about the origin of the message is punishable with imprisonment up to three years with fine.)
However, there is no mention of any sort of regulation for delayed supply of orders. In many websites the terms and conditions mention that there will be no reinstalment of money for cancellation of order after the order has been shipped. Therefore, the consumers on many occasions have no other choice but, to wait for the delivery of the order. Sometimes the delivery happens after the passage of time in which the certain product was required. Here again the consumer is highly irritable and inconvenienced.
Case: Shreya Singhal V Union of India
In 2012, two girls (Shaheen Dhada and Rinu Srinivasan) were arrested by the Mumbai police for the posting and liking of comments on Facebook, relative to bandh announced by the Shiv Sena as a consequence of their chief Bal Thackrey’s death. This action by the two girls had supposedly led to massive public protest and hence, they were arrested.
The petitioner (Shreya Singhal) in Public interest filed a writ citing Article 32 of the Constitution and saying that Section 66A of the IT Act was violative of an individual’s right to freedom of speech and expression. The writ consisted of two main issues:
- Whether Sections 66-A, 69-A and 79 of the IT Act are constitutionally valid?
- Whether Section 66A of IT Act is violative of fundamental right of freedom of speech and expression?
Arguments of the petitioner
- Article -66A of IT Act 2000 infringes the right of Freedom of Speech and Expression as enshrined under Article 19(1)(a) of the Indian Constitution.
- The petitioners argued that the causing of disturbance, hassle and so forth are not covered under the reasonable restrictions as expressed under Article 19(2) of the Indian Constitution.
- Section- 66A is vague in nature and infirmity has been created by this section as it does not properly define the terminology used under the section and it left the gates open for interpretations of this section according to the desire of the law enforcement agencies. Thus, the limitation is absent and not provided by the section.
- The section violates the Article 14 of the Indian Constitution as there is no “Intelligible differentia” with respect to why just methods for communication are focused by the Section-66 A. This results in self-discrimination which by the way violates the Article 14, 21 of the constitution.
- The petitioners also argued that the section construed arbitrary powers to the authorities for its interpretation.
As a result of this case, there is no legal control of spam mails, and other such methods of nuisance caused by the e-commerce industry. as discussed above access to mail by these companies displays a violation to the right to privacy which also, falls under the fundamental right to life and personal liberty. As the case discusses a violation of another fundamental right (right to freedom of speech and expression) due to the presence of Section 66 A of the IT Act. This raises the question that which fundamental right should be emphasized on or whether the situation should be determinant of which fundamental right should be of more importance in the given scenario?
- Fraud: An e-commerce cash system enables online transactions to become a globally accepted business. In the current trend of online buying and selling, e-commerce frauds can occur both offline and online. While transacting online, Fraudsters seek to harass the merchants or the banks by committing scams like these mentioned below,
- Even if the fraudster does not intend to buy anything from the shopping cart, he or she still places an order by entering incorrect details and making the payment mode as cash-on-delivery just to harm the retailer.
- If someone’s credit/debit card information is stolen or lost, fraudsters simply make payments without the knowledge of the real user by using their credit card details.
- If the original database is stolen from a bank or ecommerce database by a hacker and he gained access to all the information of the credit/debit cards stored in these databases then, credit/debit card fraud is feasible even if the card is not present.
Types of fraud
Credit Card Fraud: Credit card fraud has been divided into two types: Offline fraud and On-line fraud.
Offline fraud- is committed by using a stolen physical card at call centre or any other place.
On-line fraud- is committed via internet, phone, shopping, web, or in absence of card holder.
Telecommunication Fraud: The use of telecommunications services to perpetrate various types of fraud. The victims are consumers, corporations, and communication service providers.
Computer Intrusion: Intrusion Is Defined as The Act of Entering Without A Warrant or Invitation; This Means “Potential for Unauthorized Access to Information, Manipulation of Information Purposefully.”
Theft Fraud: – Using a card that is not yours is referred to as theft fraud. As soon as the owner provides feedback and contacts the bank, the bank takes immediate actions to trace the thief.
Internet fraud and scam cases
Asif Azim Case
Azim was working at I-Energizer, a call centre in Noida, he managed to gain access to the credit card details of one of his clients, Barbara Campa. He then created an email account in Campa’s name and used it to place an order on Sony India’s website, using Barbara Campa’s credit card information. Citibank, Sony India’s credit card company, approved the transaction, and the items were delivered to Azim’s home the following week. Things went wrong, when Campa realised she had been charged for something she had not bought and informed the bank about the same. The matter was reported to the CBI.
IIMS Doctor Case
The Central Bureau of Investigation (CBI) investigated a case in which an All-India Institute of Medical Sciences (AIIMS) doctor was duped by an unknown individual who defrauded him of his money over the internet and used his credit card details to shop all over the world. When the doctor complained to the CBI about receiving inflated credit card bills, the case was brought to their attention. Following an inquiry, it was discovered that someone had been purchasing commodities for vast sums of money in several nations using the doctor’s credit card.
E-commerce fraud detection
- Existing fraud detection systems are either not sustainable or strong enough to be used on large-scale online e-commerce platforms with billions of users and goods, or are developed for other application domains such as search engine click fraud, tax fraud, and phone fraud, which are inappropriate for e-commerce fraud detection.
- E-commerce fraud detection is a challenge for the following issues:
- The scalability issue: Fraudulent products are typically hidden among billions of innocuous things, making it difficult, even if not impossible, to detect them with high-complexity systems.
- The efficiency and robustness issue: Fraudulent products are often marketed using a variety of constantly updated tactics, and the advertisements are designed to mirror the actions of benign consumers.
- As a result, accurately identifying and modelling ecommerce scams is a difficult task. To summarise, understanding harmful e-commerce promotions, i.e., online e-commerce frauds, and further defending against them by establishing an effective, robust, and scalable fraud detection system is critical to the healthy growth of e-commerce.
Ineffective laws dealing with fraud in India
- Information Technology Act, 2000: In the act, there is no particular mention of economic cybercrime. As a result, cyber fraud as a crime has yet to be properly defined, making it difficult for law enforcement authorities to prosecute different accused persons for various economic cyber-crimes. It will also be impossible to charge the offenders under current statutes since they were not drafted to incorporate cyber frauds within their ambit.
- Indian Penal Code, 1860: The Indian Penal Code does not define the term “fraud.” However, Section 25 of the Indian Penal Code tries to define the term “fraudulently” by stating that there can be no fraud without the intent to defraud. Fraud is defined by Indian courts as an intentional act of deceit with the intent of obtaining something.
Intellectual Property Rights
Laws relative to intellectual property rights were formed because of the shift of humankind to be totally dependable on the internet as a source of information, profession, recreation, etc. after the development in technology.
E-commerce depicts a perfect example of such change. It has converted physical marketing to online mode, making shopping less time consuming and much more physically relaxing. However, as IPR laws have taken responsibility for governing the internet, there are a few governing the e-commerce industry as well.
The main law relative to the e-commerce industry is the Copyright Act. Section 23 of this Act speaks of the penalty for damage to computers, computer systems, etc.
Article 4 and 5 of the WIPO Copyright Act Treaty illustrate upon content, design, the software underlying the website and its platform and Trademarks. A trademark is a logo, sign or word that represent a certain company and is unique for every different company. No new company is allowed to pick a trademark that by any means of physical appearance depict an established company’s trademark, so much so that it would deceive consumers.
The Act also elaborates on patents of software functionality and methods underlying e-commerce. A patent is a legal title that is given to an owner for the innovation of a unique product. This title ensures that no other is able to sell, use or make this product for a limited period of time.
The problem with the IPR Act is the lack of governance of the law. Although the law has set many idealistic rules, it fails to imply it within society and often remains theoretic. It is important for this law to have bodies that govern each sub-sub-division that exists within the law. Given that this law governs technology and keeping in mind the rapidness with which technology is developing, the law should be regularly checked upon and updated with increasing innovation in the techno field.
Online Dispute Resolution
Overview of ODR systems
- Online dispute resolution (hereinafter referred to as “ODR”) is a form of dispute resolution that makes use of technology to make it easier for parties to resolve disagreements.
- As the number of people using the Internet grows, it’s becoming more important to design effective processes for settling Internet conflicts, because conventional mechanisms, such as arbitration, can be time-consuming, costly, and trigger jurisdictional issues.
- Effective processes for resolving online conflicts are thought to have an impact on the growth of e-commerce.
- The origins of ODR can be traced back to the alternative dispute resolution movement. In reality, ODR arose as a direct online extension of ADR. ADR approaches such as consultation, conciliation, mediation, and arbitration have proven to be a successful way to avoid the heavy workload exerted by judicial procedures while also providing consistency, speed, and cost savings. When these types of ADR are paired with ICT, it creates a powerful combination.
Main types of ODR
(1) Negotiation: – Negotiation, in its most basic sense, is an exchange of ideas and solutions between people that want to resolve a disagreement outside of court. Negotiation is becoming more relevant in the era of electronic commerce for a variety of reasons. First, the swift means of contact that are now available make it easier for parties to negotiate. Second, when it comes to legal issues in transborder commerce, the concept is known as the “confidence gap” raises the parties’ interest in seeking alternatives that do not include the use of legislation and legal procedures. Third, the technical resources currently available to disputants open the door to a new set of “supported” negotiating tools that can be used without the involvement of a third party. Finally, streamlined ODR systems also allow for the addition of a previously unofficial consultation stage before the mediation or arbitration process starts.
(2) Mediation: – It’s a peer-to-peer consultation that takes place over the Internet with the assistance of a human mediator. Online mediation is distinguished by the absence of face-to-face interaction, and technical innovations play such a major role that they are referred to as a “fourth party.” Online mediation facilities are provided by Juripax, Modria, and The Mediation Space, among others.
(3) Arbitration: – Arbitration is a mechanism in which a case is brought to an impartial, private tribunal, which makes a judgment by allowing the parties to make the requisite submissions to provide sufficient facts to back up their claims.
ODR is ideal for India
- Avoids Jurisdiction Issues: – ODRS has an advantage over land-based judicial structures in that it eliminates the question of whether a court has authority over a particular matter. The question of authority is particularly important given the global existence of the Internet. When doing business over the Internet, certain parties may be subject to international jurisdiction and regulation. ODRS could not only settle diplomatic disputes, but it could also prevent them.
- Low-Cost: – Litigating a disagreement can be expensive. The cost of hiring an attorney accounts for a significant part of the total cost. In certain cases, groups using the ODRS for online dispute settlement would not need to contact an attorney at all.
- Ease of access: – ODR is open to anyone who has an access to an internet connection. And one does not need a computer or internet connection at home or at work to access the internet. Access is possible through a vast number of cyber cafés that are springing up in every corner of India.
- Efficient time management: – In reality, one of the most important features of ODR strategies is that they save time, which is especially important in an area where courts are overburdened with cases and trials that can last for years. . In face-to-face (F2F) trials, the disputants and their counsel must be physically present at any court or other tribunal date set. Since ODR does not entail transport or attendance, the company’s executives are available. The same is true for consumers or even other people in non-commercial disputes.
- Growth of E-commerce: – ODR promotes e-commerce confidence, which enhances e-commerce and, as a result, boosts the growth of the digital economy. The rise of the digital economy has a strong impact on the country’s overall economy.
Problems ODR faces in India
- Personnel: – One of the main roadblocks is a lack of trained professionals to staff ODR agencies and offer advice to customers and companies. It would be almost impossible for lawyers who have been practising for decades in the conventional style of practise to adapt to the modern wave in dispute settlement known as ODR.
- Lack of Confidentiality and Security: The confidentiality of classified information is a big challenge for ODRS. Common ADR practise does not leave a physical record. For ODRS, there is no such assurance. Everyone could quickly print out the e-mails used in the process and share it with others.
- Impersonal: – The parties to the conflict are nearly universally agreed that mediation is more successful when they are personally present before the mediator. As Joel Eisen argues, “the great paradox of online mediation is that it imposes an electronic distance on the parties, while mediation is usually an oral form of dispute resolution designed to involve participants in direct interpersonal contact. ”
We have come to understand that although, Indian law still consists of many loopholes, which creates space for cybercriminals to continue misusing the internet (in the e-commerce industry) and thus, the consumers of the e-commerce industry remain at risk. In recent years, the increased usage of the e-commerce platform because of the COVID-19 pandemic has raised a red flag to lawmakers, and thus, recently many actions have been taken to enhance the not-so-firm law. This in turn has helped decrease cybercrime to a decent extent.
Nonetheless, it is important to remember that most consumers are still unaware of the reforms made in the law. It is also important to address that much of these reforms are vague and still allow opportunities for cybercrime to expand. Therefore, it is important that lawmakers follow the Britisher’s technique of dividing and ruling. Each legal section involved in e-commerce such as Torts, contracts, intellectual property rights, etc. should be investigated individually and in-depth before it is reformed. The main aim of these lawmakers should be to ensure that the reformed laws are to the point and create no opportunity to be misinterpreted. This is what this article has also tried to achieve.
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