consumer protection

Draft Consumer Protection E-commerce Rules keep companies on tenterhooks

Post By : Abhilash Shrivastava
Post Date : June 23, 2021
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The government has come up with the proposed amendments to the e-commerce regulations under the Consumer Protection Act to draw a legitimised blueprint for the strict compliance of rules by these firms. The notification issued on Monday had Indian government detailing the modalities and various parameters of conducting business while implying that they were being issued after the accusations of widespread unethical and rampant trade malpractices in the e-commerce ecosystem came to the fore.

Though, co-incidentally, quite a few provisions bear resemblance to the laws legislated for social media companies under the IT intermediary rules announced recently. Proposed amendments seek to make online retailers more liable whenever a purchase is made using their platforms while ensuring greater transparency and fairness.   

First and foremost, the draft rules aim at doing away with “specific flash sales” as organised by e-commerce platforms. However, going by the draft rules, traditional e-commerce flash sales are not disallowed; specific flash sales or back-to-back sales, precisely fraudulent in nature, which consistently constrict customer choices, inflate prices and negate a level playing field, are prohibited. 

The rules also include the provision of “Fall-back liability” according to which, if a seller fails to deliver goods or services as promised and if such unethical behavior turns into a potential loss to the customer, then firms will be held accountable for the same.

“The rules, when implemented, will certainly purify the highly “vitiated” e-commerce business of India due to “unfair and illogical” business practices of foreign funded e-commerce companies.
We expect that now, everyone will fall in line to comply with the rules and the e-commerce business in India will grow leaps and bounds”, the Confederation of All India Traders (CAIT) said.

It’s a harsh reality that some e-commerce majors direct many consumers to make contacts with sellers in case of grievances, on account of any problem associated with purchased goods and services. With fall-back liability in place, consumers will get directly in touch with these platforms for which e-retailers need to appoint the chief compliance and the grievance redressal officer.

“While we await the policy’s finer print, we can expect the initiatives to drive greater transparency for end customers. While certain actions may boost the government’s ‘Make in India’ initiative, we can be sure that the customer is once again the ‘king’ – with more access to diverse options. Overall, we can expect the policy to take into consideration the interest of all players, and open avenues for the growth of the sector”, said Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East & Africa, CBRE.

The rules also plan to counter the manipulative searches or distorted search results to nix any favoritism given to any platform. This move comes as a huge reprieve to those sellers and traders who have long been opposing such biased practice.

The rules not only bring about radical but also systemic changes in the functioning of e-commerce platforms. It proffers some changes in consumer’s experience, too.  Now, e-commerce companies cannot make any information available related with any person to anyone without his or her explicit consent and approval. 

Moreover, the government intends to push one of its flagship initiatives “Make-in-India” through it, as the provisions make display of domestic products, alternative to their imported counterparts, mandatory to the consumer. Besides this, it proposes to incorporate these companies to be a constituent of National Consumer Helpline.

Online retailers will now have to register themselves with the department of promotion for industry and internal trade (DPIIT). Also, no logistics service provider of marketplace e-commerce company ought to provide preferential or prejudiced treatment between the sellers of the same class. Furthermore, firms and allied companies associated with e-commerce companies will be disallowed to be enlisted as sellers on respective platform.

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