Consumer Protection in Digital Transactions: Legal Safeguards and Gaps

The rapid proliferation of digital commerce in India, driven by affordable internet access, smartphones and fintech innovation, has transformed consumer behavior and transaction patterns. While digital transactions offer unprecedented convenience, they have also introduced a complex array of risks, including data breaches, misleading advertisements, identity theft, and inadequate redressal mechanisms. This paper critically examines India’s legal and regulatory framework aimed at safeguarding consumer rights in the digital economy. The Consumer Protection Act, 2019 and the Consumer Protection (E-Commerce) Rules, 2020 mark a significant step forward in recognizing and addressing challenges unique to digital transactions. Supplementary provisions under the Information Technology Act, 2000 and sector-specific regulations by the RBI, SEBI, and TRAI collectively aim to ensure transparency, grievance redressal, and cybersecurity. However, persistent legal gaps undermine these protections, notably the delayed implementation of the Digital Personal Data Protection Act, 2023, weak enforcement capacity, inadequate regulation of emerging technologies like AI and dark patterns, and poor consumer awareness, especially in rural and semi-digital regions. The article also evaluates judicial trends and regulatory interventions that have attempted to expand platform accountability and streamline dispute resolution. By drawing on international models such as the EU’s GDPR and Digital Services Act, and the U.S. FTC framework, the paper identifies best practices that can inform India’s future regulatory design.