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THE POWER DUO: DIGITAL MARKETING MEETS E-COMMERCE

CONTENTS

LIST OF CASES

 DAV College v. State of Punjab (1971) 2 SCC 269.  T.M.A.Pai Foundation & Ors vs State Of Karnataka 2002 INSC 454  S.P. Mittal v. Union of India AIR 1983 SC 1,  Yogendra Nath Singh v. State of Uttar Pradesh AIR 1999 All HC 356  Rajershi Memorial Basic Training School v. State of Kerala AIR 1973 Ker HC 87  Pratinidhi Sabha v. State of Bihar AIR 1973 Pat HC 101  Re: The Kerala Education Bill, (1959) SCR 995  Ahmedabad St. Xaviers College v. State of Gujarat, AIR 1974 SC 1389,  St. Joseph’s College v****. Union of India , AIR 2002 SC 195  State of Kerala v. Mother Provincial AIR 1970 SC 2079  P.A. Inamdar v. State of Maharashtra 2005 (6) SCC 537  Ashoka Kumar Thakur v. Union of India (2008) 6 SCC 1 138  Bobby Art International v. Om Pal Singh Hoon, AIR 1996 SC 1846.  Bijoe Emmanuel v. State of Kerala 1987 AIR 748  Mohini Jain v. State of Karnataka , (1992) 3 SCC 666  Pramati Educational Trust v. Union of India, (2014) 8 SCC 1  Commissioner Hindu Religious Endowments, Madras v****. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, 1954 SCR 1005  Rev. Sidhajbhai Sabhai v. State of Bombay , 1963 SCR (3) 837  The Ahmedabad St. Xavier’s College v. State of Gujarat  Suresh v. State of Tamil Nadu AIR 1997 SC 1889.  Hamdard Dawakhana v. Union of India AIR 1950 SC 554  Sushil Chowdhary v. State of Tripura AIR 1998, Gau 28  International Shoe Co. v. Washington , 326 U.S. 310  Motion Pictures USA v. iCrave TV 2000 US Dist Lexis 11670  Core-Vent Corp 11 F.3d 1482  Calder v. Jones 465 U.S. 783  Cybersell, Inc. v. Cybersell, Inc 130 F.3d 414

TABLE OF ABBREVIATION

 AIR : All India Reporter.

 All Cr C. : Allahabad Criminal Cases.

 All Cr R. : Allahabad Criminal Reports

 All LJ : Allahabad Law Journal

 All. E. R. : All England Law Reports

 Andh. W. R. : Andhra Weekly Reporter.

 Art. : Article

 ASIL : Annual Survey Of Indian Law

 BLIR : Bihar Law Journal Reports

 Cr LJ : Criminal Law Journal

 Cr LR : Criminal Law Reporter.

 Cr P C : Code of Criminal Procedure

 CrLT : Criminal Law Times.

 Cut. L.T. : Cuttack Law Times.

 CWN : Calcutta Weekly Notes

 e.g. : Exampli Gratia

 Ed. : Edition

 ed. : editor

 HC : High Court

 i.e. : That is

CHAPTER I

INTRODUCTION

1.1. INTRODUCTION

Technological breakthroughs in communication and the internet have provided us with immediate worldwide access. Commercial exchanges originated with the barter system, which entailed the trade of commodities and services for alternative goods and services. Cattle were esteemed between 10,000 and 5000 BC for their many use as a source of revenue (nutrition, apparel, and reproduction). Subsequently, other types of currency were employed to exchange the precious metals discovered within the seashells for goods. Trading has consistently been significant in human history, from ancient civilisations such as the Harappans and Mohenjo-Daro to more recent ones like the Greeks, Romans, Egyptians, Mayans, Incas, and contemporary society. The commerce of silk and spices attracted the British, French, Portuguese, and Dutch to the East. The legal frameworks of all British colonies have been significantly shaped by common law. The Indian Contract Act was enacted by the British government as part of a series of acts intended to regulate commerce in India. Consequently, the Sale of Goods Act and the Indian Contract Act eliminated the essential principles governing contracts, irrespective of their formation in person or online. It is remarkable to realise that the internet was first developed with companies as its primary focus, given its widespread use by individuals today. Military strategists inside the U.S. Department of Defence saw the Cold War as an exclusively military confrontation between the United States and Russia (then the Soviet Union). The only objective of the project was to avert the loss or compromise of essential data in the event of a nuclear war. The packet switching technology facilitates message delivery between computers, primarily inspired by vehicular traffic flow. This ensures that information remains accessible even if the host systems are obliterated. The inaugural high-speed computer network, ARPANET, was established in the 1960s by the Advanced Research Projects Agency of the United States Department of Defence. By the 1970s, it expanded from four hosts distributed across several university campuses to twenty-three hosts connecting universities and government laboratories

leave your residence to sell an item, propose an offer, accept it, and complete the payment. The prevalence of purchasing items online using mobile devices has increased in recent years. The proliferation of the Internet and the removal of trade restrictions resulted in a surge in e- commerce. Multiple factors have facilitated the growth of internet commerce in India. This encompasses an increase in social media users, reduced internet data costs, the government's ongoing advocacy for free markets, the digitisation of financial services, the extensive presence of computers and smartphones in families, and favourable legislation. A promising future awaits e-commerce, having recently secured fifty percent of India's market share. The burgeoning e- commerce business has experienced significant growth over the past two decades, evolving from online sales to a multimillion-dollar industry. The proliferation and acclaim of media, particularly the internet and social media, alongside technological innovations and the supportive contributions of governments and international organisations in establishing the necessary physical and legal frameworks, have been identified as factors contributing to its success. The imperative for legislation to promote the growth of trade and commerce was acknowledged by global civilisations as the internet and e-commerce ascended in significance. The UNCITRAL Model Law was issued by the US Commission on International Trade Laws (UNCITRAL) to ensure that member states properly recognised electronic documents, signatures, and transactions. Thus, India's primary statute for combating cybercrime and regulating e-commerce is the Information Technology Act of 2000. The foundation of both domestic and global commerce was traditionally established through written contracts, prioritising paper documentation. The significance of paper documentation in commerce has been acknowledged for an extended period. The internet eliminates costly paper documentation and offers a practical means to do business swiftly and efficiently from any location worldwide. Online shopping has several advantages, including efficiency, convenience, and profitability; nonetheless, it remains an emerging business that faces novel and intriguing challenges daily. Notwithstanding its numerous disadvantages, e-commerce has garnered the endorsement and confidence of several governments and international organisations since its inception. The UNCITRAL Model Law addresses the primary concern of an absence of a legal framework by requiring nations to incorporate its stipulations into their national legislation. 3 This would guarantee that electronic

(^3) Das, S. (2024). E-Commerce Platforms Extend Beyond Selling. A Case Study on India. In: Dutta, S., Rocha, Á., Dutta, P.K., Bhattacharya, P., Singh, R. (eds) Advances in Data Analytics for Influencer Marketing: An

documents and signatures are legally recognised on the same level as their paper and handwritten counterparts. Numerous international bodies have been instrumental, including the WTO, OECD, UNO, WIPO, and UNCTAD (the United Nations Conference on Trade and Development). Likewise, the United States and European Union were forerunners in implementing specific regulations for digital commerce. To acknowledge electronic transactions, documents, and signatures, India implemented the Model Law through the enactment of the Information Technology Act of 2000 and amended the Indian Evidence Act of 1872, the Indian Penal Code of 1860, and the Bankers' Book Evidence Act of 1891. Electronic contracts for the sale of goods and services are regulated by three statutes: the Indian Contract Act of 1872, the Sale of Goods Act of 1930, and the Information Technology Act of 2000 (IT Act). In the event of a disagreement within the Information Technology Act, the provisions pertaining to technology must prevail. The introduction of legislation governing e-commerce was unfortunately postponed from the customer's perspective. The Consumer Protection Act 2019 was enacted and came into effect on July 20, 2020, around 20 years after the USA, UK, and other European countries implemented laws regulating various facets of e-commerce. The Consumer Protection (Ecommerce) Rules, 2020, impose stringent regulations on diverse e- commerce businesses and vendors, serving as a crucial measure for safeguarding online consumers. The appropriate application of these constraints is crucial for maintaining their efficacy. The rise in cybercrimes adversely affects e-commerce. The exceedingly low rates of detection and conviction render cybercrimes, such as data theft, a significant issue. The regulation of Indian e-commerce is mostly dictated by the Indian Contract Act of 1872, the Sale of Goods Act of 1930, the Information Technology Act of 2000, and the Information Technology (Intermediary) Rules of 2011. 4 The Consumer Protection Act of 2019 and its associated 2020 regulations are equally significant. The e-commerce sector benefits from a more solid legal structure when integrated with other governmental statutes, including the Goods and Services Tax Act of 2017, the Intellectual Property Regulations, the Indian Penal Code of 1860, the Indian Evidence Act of 1872, and these recommendations. The National Ecommerce Policy and Data Protection Bill is anticipated to be passed soon.

Interdisciplinary Approach. Information Systems Engineering and Management, vol 9. Springer, Cham. https://doi.org/10.1007/978 4 - 3 - 031 - 65727 - 6_ Pachpande, Sandeep, Asha Pachpande, and J A Kulkarni, 'Ready for Take-off? A Case Study on Indian E- commerce Industry', Indian Business Case Studies Volume I (Oxford, 2022; online edn, Oxford Academic, 20 Oct. 2022 ), https://doi.org/10.1093/oso/9780192869371.003.0020, accessed 8 Apr. 2025.

worldwide e-commerce sector. 5 With the proliferation of e-commerce, the characteristics of logistics services evolved on both local and global scales. The logistics and supply chain business has transformed due to the widespread distribution of once tiny shipments that now traverse several channels to various global destinations. Throughout the COVID-19 pandemic, the e-commerce sector provided global advantages by enabling individuals to circumvent physical presence in public spaces, hence diminishing congestion and the risk of contagion. Despite the substantial volume of orders, logistics significantly contributed to the secure delivery of goods; thus, stringent regulations that bolster e-commerce corporations while also offering growth prospects for smaller firms are necessary. Platforms such as Alibaba facilitate both business-to-business and business-to-consumer e-commerce, making the protection of nonconsumers essential. Large e-commerce firms can endure financial shocks, but smaller ones cannot. Consequently, they are unable to broaden their market. Moreover, implementing stringent regulations on enterprises while safeguarding client interests might mitigate the likelihood of a limited number of organisations monopolising a significant portion of the market. It is essential to recognise that entities beyond clients may also pursue safeguards against unethical business conduct. Six consumer rights previously acknowledged by the 1986 Act are anticipated to be safeguarded under the Consumer Protection Act of 2019. Sellers, particularly e- commerce firms and marketplace and inventory e-commerce organisations, must adhere to the E- commerce Rules, which impose certain limitations. The applicability of these restrictions to all forms of e-commerce remains contentious, notwithstanding the expanded wording and scope of the fundamental statute. The existing statute confers upon the District, State, and Central Councils just consultative authority, whereas the Central and State "Consumer Protection Councils" formerly held the obligation of safeguarding consumer rights. District, state, and federal consumer protection agencies were established to collaboratively safeguard consumers' rights, deter unethical business activities, and restrict the creation and dissemination of misleading advertising. It has been authorised to conduct investigations, searches, and seizures to fulfil its mandate. It possesses an investigative unit^6. This legislation represents progress in this domain, unlike previous statutes that just offered councils objectives without further authority.

(^5) Agarwal, Sugandha & Professor, Asst. (2015). " E-Commerce In India: On an Upswing ". International Journal of Research and Scientific Innovation ( IJRSI). 2. 40-51. 6 Byrnes, William H, and Christopher M Sove, 'India: India E-Commerce Taxation', in Ana D Penn, and Martha L Arias (eds), Global E-Business Law & Taxation (New York, NY, 2009; online edn, Oxford Academic, 31 Oct. 2023 ), https://doi.org/10.1093/oso/9780195367218.003.0004, accessed 8 Apr. 2025.

Nonetheless, its effectiveness can only be assessed over a prolonged duration. The 2019 Act diminished the criteria for jurisdiction, permitting consumer complaints to be filed online or offline at the complainant's residence or place of business. While the foundational legislation underscores consumer rights and regulatory bodies, e-commerce rules delineate the responsibilities of sellers, platforms, and inventory-based e-commerce firms. Judicial interpretation is necessary for some generalisations and ambiguous language. Nonetheless, the prevalence of unregistered social media vendors, who transmit offers and products through proprietary applications or directly from unknown suppliers, renders the oversight and regulation of their activities exceedingly challenging under current guidelines. Customers often possess just the telephone numbers of these merchants. A consumer complaint must provide the defendant's postal address; otherwise, it is not mandatory. Despite expert assistance, it will be profoundly challenging for a singular central consumer protection body to supervise emerging e-commerce companies, but the Act enhances the visibility of marketplace and inventory e-commerce firms. Regardless of the speed of implementation, legislation must be proactive and include a robust enforcement framework to be effective. Considering that the 2019 Act has been in operation for just a few months, it will require time to thoroughly comprehend the implementation of its provisions. Cybercrime persistently undermines transactions and jeopardises e-commerce owing to a deficiency of proficient personnel to address the issues. E-commerce is adversely affected by the rise in online financial crime, requiring the scrutiny of these instances by a robust, seasoned, and reputable team of cybersecurity experts. Assessing the manner in which authorities address cybercrime incidents is really disheartening. European nations established e-commerce law in the early 2000s, but India passed the Information Technology Act in alignment with the UNCITRAL Model Law to create a fundamental legal framework for e-commerce. Despite the existence of e- commerce regulations in the United States and Europe throughout the early 2000s, the Indian Information Technology Act established the fundamental criteria that were subsequently modified.

1.3 EVOLUTION AND DEVELOPMENT OF ONLINE RETAILING IN INDIA Online shopping had its first boom in India not long after the advent of the internet in 1995. It was in 1996 when the first online B2B directory was established. Beginning with the launch of marriage websites in 1996, business-to-consumer (B2C) ecommerce had its start. After that, "recruitment portals" may be accessed over the internet. However, not many people used it

description of marketing. As with any business, the current marketing strategy is centred on helping companies meet customer demand for their products. As a result, modern marketing campaigns not only feature the product or service itself, but also ancillary offers such as delivery, support, guarantee of after-sales service, and warranty. In my perspective, marketing is all about satisfying desires and needs with a product or service that people desire. Advertising is the bedrock of any business. The goal of marketing is to raise product and service awareness among target consumers. Marketing entails finding out what customers want, creating demand for it, encouraging people to want to buy it, and then giving it to them. All three of these factors—audience, media platform, and organization—are now part of what is often known as "marketing" in today's economy. Definition of e-commerce E-commerce, or electronic commerce, refers to the buying and selling of goods and services conducted entirely online. An online store is often known as a "e-business" or "e-commerce" for short. One term for purchases made via an electronic network is "e-transactions." In this context, "e-commerce" refers to any trade that takes place over the internet and other electronic devices. More specifically, it concerns business transactions that are conducted digitally between consumers and companies. One must first understand digital value exchange in order to grasp e- commerce. The term "e-commerce" is used by the World Trade Organisation (WTO) to describe the buying and selling of products and services conducted through electronic means. Supply chain management, inventory control, data automation, e-commerce, mobile commerce, online marketing, EDI, and online transactions are just a few of the technologies used in electronic commerce, often known as e-commerce. 8 There are two main approaches to online shopping: indirect e-commerce, which involves placing indirect orders for physical or virtual goods and services, and direct e-commerce, which involves buying and selling physical goods and services directly online for things like paying bills and topping up internet.

(^8) Wilson, L. S. “WHAT IS MARKETING?” Scientific Horticulture , vol. 25, 1974, pp. 108 – 14. JSTOR , http://www.jstor.org/stable/45126695. Accessed 8 Apr. 2025.

1.5 LITERATURE REVIEW

1. Comparative Advertising – A Boon or a Bane to Consumer Interest by GV Narsimha Rao^9 Comparative advertising, wherein a firm juxtaposes its products against those of competitors, is a common marketing strategy today. G.V. Narasimha Rao thinks that advertising is essential for educating and convincing consumers. Even when the objective is to emphasise the benefits of a product or service, its comparative character often results in negative repercussions, such as denigrating rival offerings. This undermines the competitor's right to protect their brand, the advertiser's right to commercial expression, and the consumer's right to accurate information.

Rao notes that, although courts recognise advertising as a kind of free expression, this protection is not unconditional. Customers may be deceived by erroneous or deceptive comparison remarks, rather than being aided in making informed judgements. Consumers in India are insufficiently safeguarded by regulations against misleading or deceptive comparative advertising, which is also ineffectively implemented. Without strong regulatory frameworks or clear standards, consumers are susceptible and sometimes unaware of fraudulent practices. Consequently, whereas comparative advertising may empower consumers by promoting comparison and competition, it may also become a liability when employed indiscriminately. Ensuring that information is truthful and non-deceptive is essential for safeguarding consumer interests in the competitive realm of advertising.

2. E-Commerce and Consumer Protection in India: The Emerging Trend by Neelam Chawla^10 investigates consumer protection laws in a 2021 article Empirical study with 290 online consumers and a comprehensive assessment of the Consumer Protection Act of 2019 and the Consumer Protection (E-commerce) Rules of 2020 indicate crucial variables impacting trust and pleasure in e-commerce. The article stresses the need of a secure and reliable digital infrastructure for the prosperity of online businesses and how cash on delivery is quickly becoming the payment method of choice for Indian consumers. Customers are more likely to

(^9) Rao, G. V. Narasimha. “COMPARATIVE ADVERTISING – A BOON OR A BANE TO CONSUMER INTEREST?” Journal of the Indian Law Institute , vol. 54, no. 2, 2012, pp. 261 – 71. JSTOR , http://www.jstor.org/stable/43953540. Accessed 8 Apr. 2025.

(^10) Chawla, N., Kumar, B. E-Commerce and Consumer Protection in India: The Emerging Trend. J Bus Ethics 180 , 581 – 604 (2022). https://doi.org/10.1007/s10551-021-04884-3 (accessed on 08 April 2025)

important subjects such celebrity endorsements, comparative advertising, and the growing importance of digital advertising. By comparing various regulatory regimes, the importance of court opinions in setting advertising standards is brought to light. Standout cases show how current constraints work in practice. Findings highlight the need for continuous reform and international cooperation in creating a fair and transparent advertising environment in India and show that strict enforcement significantly improves consumer welfare.

1.6 RESEARCH QUESTIONS

1. How do existing Indian laws regulate marketing and e-commerce practices, and what are their implications for consumer protection and business compliance?
2. In what ways do marketing strategies such as influencer promotions and personalized advertising intersect with legal and ethical standards in Indian e-commerce?
3. How does the Indian legal framework for e-commerce and digital marketing compare with global regulatory models in countries like the USA, EU, and China?
4. What legal challenges arise from emerging marketing techniques (e.g., mobile marketing, video content) within the Indian e-commerce ecosystem, and how can they be addressed through policy reform?

1.7 OBJECTIVES

1. To analyze the existing legal framework governing e-commerce and digital marketing practices in India, with a focus on consumer protection and regulatory compliance. 2. To examine the legal and ethical implications of modern marketing strategies such as influencer marketing, personalized advertising, and mobile promotions in the Indian e- commerce sector. 3. To compare India's e-commerce and marketing regulations with international legal standards, identifying key similarities, differences, and areas for improvement. 4. To identify current legal challenges in regulating emerging digital marketing trends in India and propose recommendations for policy development and reform.

1.8 LIMITATION OF THE STUDY While this study aims to provide a comprehensive analysis of marketing and e-commerce laws in India, several limitations must be acknowledged. First, the legal landscape surrounding e-

commerce and digital marketing is rapidly evolving. New regulations, amendments, and judicial interpretations may emerge during or after the course of this research, potentially affecting the relevance or accuracy of the findings. Due to this dynamic nature, the study may not capture the most recent legislative or regulatory developments at the time of publication.

Second, the research primarily focuses on the Indian legal framework and selected international comparisons, such as the United States, European Union, and China. However, due to space and scope constraints, it does not encompass a detailed analysis of all global jurisdictions, which may limit the generalizability of the comparative insights.

Third, the study relies on secondary data sources such as legislation, academic literature, policy reports, and case studies. While these sources offer valuable perspectives, the absence of extensive primary data (e.g., interviews with legal experts, marketing professionals, or regulators) may limit the depth of practical insights into how laws are implemented and enforced on the ground.

Additionally, the effectiveness of laws is often influenced by enforcement mechanisms and public awareness, aspects that are difficult to measure comprehensively within the scope of this study. Consumer behavior and business compliance are also influenced by cultural, economic, and technological factors, which are considered only to a limited extent.

Lastly, while the study includes chapters on marketing and e-commerce concepts, it does not provide in-depth technical or economic analysis of marketing strategies themselves, as the primary focus remains on legal and regulatory aspects. These limitations highlight the need for future interdisciplinary research that incorporates legal, technological, and behavioral dimensions for a holistic understanding of e-commerce regulation.

1.9 SIGNIFICANCE OF THE STUDY

This study holds significant value in the context of India's rapidly expanding digital economy, where e-commerce and digital marketing have become central to business operations and consumer engagement. As the boundaries between traditional and digital commerce blur, legal and regulatory frameworks must evolve to ensure fair practices, protect consumer rights, and support sustainable market growth. The significance of this study lies in its effort to critically