Legal action against businesses hiding prices on social media

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The Consumer Affairs Authority (CAA) is to take legal action against online businesses that do not announce the retail prices when advertising their products to consumers, as it is a violation of the gazette notification issued in 2011, The Sunday Morning Business learns.

Speaking to us, a CAA senior official, who wished to remain anonymous, stated that complaints from consumers across Sri Lanka were exponentially rising with regard to how online businesses conduct their operations through social media pages and how they fail to deliver the promised product after requesting for the payment in advance.

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“Businesses on social media direct consumers to inbox them for prices, which is an illegal task, as per CAA guidelines. Therefore, prompt measures will be taken to trace and disbar such online businesses to curtail this ongoing issue,” the official highlighted.

Furthermore, the official advised that consumers should not purchase any products from businesses operating on social media unless a valid mobile number and address were mentioned on the profile or communicated to consumers.

“The CAA has already taken measures to inquire into businesses operating on social media, but there is a huge challenge in tracing them all and contacting them for an inquiry. Thus, consumers should be aware of whom they are purchasing the product from and also the valid details about them,” the official added.

The CAA, acting under Section 10(1)(a) of the CAA Act No. 9 of 2003, directed that all manufacturers, importers, distributors, and traders, in every advertisement in respect of the sale of any article or articles published in newspapers, films, television, video, audio, internet, or any other print, electronic, or electronic media, shall specifically mention the retail price of such article or articles for sale in such advertisement.

“Any manufacturer or trader who fails to comply with any direction issued under Subsection (1) shall be guilty of an offense under this Act,” the gazette notification in this regard specified.

Accordingly, this direction was effective in Sri Lanka from 1 February 2011.

Meanwhile, to lead and resolve such problems faced by micro and small enterprises in Sri Lanka, Advocata Institute last year launched the Red Tape Project to benefit entrepreneurs with the removal of legal and regulatory barriers faced in their businesses.

The report that was published highlighted the various regulatory barriers these enterprises face, ranging from issues of finance, registration, space, and labour and measures that can be taken to address such barriers by proposing appropriate recommendations to streamline and rationalise the process of registration for sole proprietors and partnerships.

Furthermore, State Minister of Digital Technology and Enterprise Development Namal Rajapaksa stressed the importance of companies and countries alike to increase their investments in digital platforms and online trading in the future.

“We hope to simplify the processes for e-businesses and we are looking at attracting more investment in the e-commerce space. We are also actively pursuing blockchain technology, which would facilitate digital currencies and a larger digital economy,” he said.

The Minister made these statements at his opening address during a webinar on “Digital Inclusion and Transformation in South Asia” organised by ORF India in collaboration with Colombo Initiative and the Sappani Foundation.

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