This article is written by Vividh Jain, from the Institute of Law, NIRMA University. In this article, the author deals with the legal perspective of a child as a consumer.
Regulation plays a significant function as a tool for social behavioural improvement. Law and social order, as the jurist H. Kelsen noted, help bring about significant changes in human behaviour. Law also helps ensure the social activity is rendered successful and activated. Scholars such as C. Sunstein and Richard T. have demonstrated the functions that the behavioural sciences play in fields such as economics and law. Law and behaviour are therefore involved in a cyclical interaction with feedback loops. Consumer policy and the law is an area where there is immense potential for applying the law as a tool to change behaviour. This is obvious from the implementation of law and action in European Union public regulation. The article examines how the European Union offers a precedent for taking a functional approach to consumer legislation. Besides, the article underlines how the approach to law and behaviour in the context of children’s consumers may necessarily be significant. These ideas provide suggestions for improving the Indian consumer protection law framework.
A new consumer segment taking shape
It is not feasible, due to geographical and terminological indeterminacies, to establish a precise moment in time when ‘the minor consumer’ came into being. Apparel retailers began selling children’s clothing in different departments in the 1910s. Of course, trade specifically targeted at kids was not entirely new at the time – toy shops already existed in Western Europe. In the eighteenth century, the move was clear because children’s divisions were produced in stores that were marketing mainstream products. However, parents were still making purchasing decisions. Minors, far from being an independent consumer group, may affect parental decisions in the best possible way.
At the same time, a more foundational transition developed in which traditional values of education, such as bargain, hunting and thriftiness, were replaced with new ones, such as wise spending. For example, in the United States, School Savings Bank services became slowly overtaken by the schooling of customers. In addition to this change in focus from investing in spending, pocket money has been gradually used as a tool to familiarize kids with managing their own finances. It can be viewed as a significant phase towards the liberation of the teenage consumer. This group’s market importance was no longer focused solely on their capacity to control buying decisions. Even more diverse are the psychological, sociological, and cultural theories brought forth for the emergence of the child-consumer. Only to support, name a few: as a response to the (relative) poverty they had encountered in their own childhood, the preceding generation (over) compensated through coddling their babies, the baby boomers; working parents also offset feelings of shame against their babies with toys and gifts; and by active marketers’ attempts to shift the connotation of consumption – from typically feminine.
European Union consumer policy and law
Market regulation and EU policies use ethical and behavioural insights to nudge consumers. There is no argument, for example, that the customer will get details about the product. At the point of buying, such details would be helpful to the customer during the actual usage of that commodity. For example, knowing the place where the product is delivered will be important on an e-commerce purchase, and this information is essential at the time of purchase. Likewise, at the point of travelling out of the network boundary, the specifics of roaming costs on a single sim card will be crucial than at the moment the sim card was bought. The standard or yardstick used to define a ‘consumer’ is another important aspect that the EU consumer policy adopts.
Legal norms take an ‘average consumer’ or a ‘reasonable prudent person’ into account. This is important as a business sometimes indulges in unethical activities such as the usage of scientific terms which the typical customer does not recognize. For an ordinary customer, for example, product packaging has to be clear and identifiable. This will lessen the prevalent informational asymmetries between businesses and consumers. In fact, simplification of the words used will also provide clarification. In the same vein, when it comes to child consumer policy, a proactive law and behaviour approach needs to be developed. The basic principles presented in EU consumer policy form a solid base in the creation of a child protection policy approach to law and behaviour.
Legal and contractual capacities
The idea of ‘legal capacities’ as a way of supporting vulnerable groups has a long tradition, heading back at least to Roman law. In order to avoid misunderstandings, it is worth noting that this is not meant by the general ability to have rights and obligations, as this is typically given to natural persons at birth. This is more of the ‘contractual capacity’ as it is important if we talk about the benefit of the teenage customers. Rules and regulations were established within the context of this definition, to assess the legitimacy of certain contracts. For ease of reference, beginning with two factors that most jurisdictions have in common may be beneficial. First of all, a minor is usually defined as a person below the age of 18 years. However, in such conditions, in the case of child marriages, for example, it is possible to obtain a majority only at the age of seventeen. The second general characteristic is that people have little or limited legal power, as long as this age of majority is not met. In practice, this means that contracts that are legally binding can not be concluded unless parental consent was given or an exception applies.
With the context of the complexities of nature and the sophistication of the child, the correct level of protection should be constantly assessed, as there are more and more dangers and lures out there. But, the children have also become increasingly competent in identifying and preventing them. The equilibrium that is then achieved varies in space and time. While there appears to exist an overwhelming propensity to improve a minor’s sovereignty, a closer look reveals that this direction is far from ‘normal.’ More recent pieces of legislation, especially in the area of unequal market practices, indicate that the battle for sufficient security and further emancipation is still underway.
Unfair commercial practices
In contract law, the protection of minors is essentially corrective in nature, since it can provide solutions only after an undesired deal has been signed already. For example, these clauses can often have mitigating effects: as participants appear to be able to quickly influence the legality of a given contract, it becomes less likely to be launched. This will hardly count as enough reassurance though. Because, there are still many unwanted contracts to be concluded (only a small percentage of which will lead to judicial review), early recognition in the form of market regulatory oversight remains necessary. Commercials and unsuitable services have been subject to stringent regulations that protect minors’ physical, emotional, and moral development. Through introducing subsequent amendments which culminated in the existing consumer law, the stringency of the provisions was made based on whether the material was transmitted or made available on-demand, less intrusively.
Challenges and opportunities
The world seemed significantly different as the underage customer ascended almost a century ago. Consumption involved face to face interaction with traders, there was no television and the Internet even less so. Although laws also altered in the wake of advancing technologies, their evolution was rather modest. The age of full legal capacity was somewhat reduced, and media policies were created to protect against undesirable content. This legislative pattern, though, which can at best be deemed cautiously emancipatory, seems to have continued at a slower speed than everyday practice. The emergence of the Internet and cell phones, in particular, has significant consequences for minors as users, both from a realistic and legal viewpoint. While the former has been addressed briefly in the historical review, the latter may require more explanation.
The problem is that e-commerce can effectively cross boundaries and thereby become subject to various regulatory systems with specific requirements, limitations, and terminologies. While underage consumers have gained freedom and mobility when combined with reduced recognizability, their protection is still organized nationwide and is based on traditional approaches. Existing legislations do not seem to be always fit for the digital environment. While it is rather evident that this will affect online businesses, particularly when legislation is dispersed or unclear, the underage consumer may also feel the consequences. Nonetheless, unauthorized and potentially voidable contracts sometimes do not fall under legal scrutiny. Consequently, legal problems that traders may experience from a theoretical standpoint will not always eventuate in actual adverse judgments. If the enhanced facility for resolving all manner of deals has adverse consequences, they do not necessarily live with the minors and/or their parents who are aggrieved. Second, litigation expenses borne by companies are likely to be partly passed on to their consumers through higher prices. But companies and customers alike would undoubtedly face the financial pressure of insufficient regulation.
Continuing digitization can, of course, not only be seen as a challenge to the smooth operation of laws from the preceding century. When used smartly, emerging technology can also be used to enhance online market protection. Legal capacities can be measured far more accurately than before by implementing advanced age verification methods. When such tools become part of smarter payment systems, there may be other opportunities as well. Consider, for example, the exceptions to the law of moral incapacity as enforced in some states in case of pocket money or own earnings. Unless modern payment mechanisms permit the ‘labeling’ of currency, these emancipatory clauses may become realistic. Digitization may also be used to reduce it, instead of generating regulatory confusion.
Indian Consumer Protection Act, 2019
The Consumer Protection Act, 2019 was primarily introduced to resolve some of the long-standing problems, such as product liability, mediation as an external conflict settlement mechanism, cheating originating from e-commerce transactions, and the implementation of international best practices. One of the major characteristics of the Consumer Protection Act, 2019 is the establishment of statutory bodies which act as a district, state, and national advisory body. But, the Consumer Protection Act, 2019 fails to define or discuss the rights of children. In this context, consumer protection regulations need to be updated from the viewpoint of the child consumer and child consumer preferences. The attitude to law and behaviour is important to the overarching objective of consumer welfare. This would be beneficial to establish a compulsory labeling system for foods that are rich in sugar and fat content.
Product details may be presented right now but this creates an additional burden for customers to identify and make informed choices. Consequently, through the Consumer Welfare Council and the Food Safety and Standard Authority, the distribution of information will be carried out on a wider scale. Brand marking increases traceability and fosters customer interest. In the case of Uday Foundation for Congenital Defects and Rare Blood Groups v. Union of India, the Supreme Court explicitly addressed the need for a ban on fast food and carbonated beverages in schools and called out for initiatives that would concentrate on safety and wellness among school children. In the Consumer Protection Act, 2019, there is a need to consider the child consumer as a separate subsection under Section 2(7) of the Consumer Protection Act, 2019.
Responsible and ethical consumerism requires the consumers to be aware of the holistic impact that our current pattern of consumption has on human rights, health, the environment, and society. Sustainable consumption is regarded as an essential prerequisite for achieving the goal of sustainable sustainability and the protection of human rights. Let the emphasis on public policies and actions for children to be an initial move towards that. Developing accurate age verification tools or smarter payment mechanisms may reduce inconsistencies and improve the efficiency of digital transactions for both merchants and customers. While caution is urged, especially when it comes to the consequences of privacy, this time the safety and empowerment of the underage user can rely on powers other than the lawmakers alone.
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