SECTION 21 OF CPA 2019 (Syllabus: GS Paper 3 – Economy)

Context: The Central Consumer Protection Authority (CCPA) has imposed a penalty of `3 lakh on education institute, an edtech platform, for publishing “false and misleading” advertisements claiming 144 selections in the Reserve Bank of India Grade B exam in 2023.

oThe CCPA issued these directions to the company under the Section 21 of the Consumer Protection Act, 2019.

Section 21 of the Consumer Protection Act, 2019

• Issuance of Directions: The Central Authority can issue directions to cease or modify any false or misleading advertisement that prejudices consumer interests or contravenes consumer rights.
• Prohibition on Endorsers: It may prohibit an endorser from endorsing any product or service for up to one year for a first contravention of misleading advertising. Subsequent contraventions may result in a prohibition period of up to three years.
• Imposition of Penalties: The Central Authority has the power to impose a penalty up to ten lakh rupees on manufacturers or endorsers for false or misleading advertisements. For subsequent violations, the penalty may extend to fifty lakh rupees.
• Penalty for Publication of Misleading Advertisements: Individuals involved in publishing misleading advertisements can be penalized by the Central Authority, with penalties extending up to ten lakh rupees.

oNo penalty applies if it can be proven that the advertisement was published in the regular course of business, except if the publisher had prior knowledge of a Central Authority order to withdraw or modify the advertisement.

• Right to Hearing: Before issuing any order under this section, the Central Authority ensures that the affected party is given an opportunity to present their case and be heard.

Central Consumer Protection Authority (CCPA)

• About: CCPA is a regulatory body established in 2020 based on the provisions of the Consumer Protection Act, 2019.
• Establishment: In 2020
• Control by: Ministry of Consumer Affairs.
• Composition: Chief Commissioner as head, and only two other commissioners as members.
• Objective: To promote, protect and enforce the rights of consumers as a class.