For the
purposes of preventing unfair trade practices in e-commerce, the Central Government
had notified the Consumer Protection (E-Commerce) Rules, 2020 with effect from 23
July 2020. However, since the notification of these rules, the Government has received
several representations from aggrieved consumers, traders and associations complaining
against widespread cheating and unfair trade practices being observed in the e-commerce
ecosystem.
Prevalence
of such unfortunate incidents has negatively impacted the consumer and business
sentiment in the market, causing immense distress and anguish to many. It was observed
that there was an evident lack of regulatory oversight in e-commerce which required
some urgent action. Moreover, the rapid growth of e-commerce platforms has also brought into the
purview the unfair trade practices of the marketplace e-commerce entities engaging
in manipulating search result to promote certain sellers, preferential treatment
to some sellers, indirectly operating the sellers on their platform, impinging the
free choice of consumers, selling goods close to expiration etc.
Additionally,
conventional flash sales by third party sellers are not banned on e-commerce platform.
But, certain e-commerce entities are engaging in limiting consumer choice by indulging
in “back to back” or “flash” sales wherein one seller selling on platform does not
carry any inventory or order fulfilment capability but merely places a “flash or
back to back” order with another seller controlled by platform. This prevents a
level playing field and ultimately limits customer choice and increases prices.
To protect
the interests of consumers, prevent their exploitation and encourage free and fair
competition in the market, the Government of India is sharing a draft of the proposed
amendments to the Consumer Protection (E-commerce) Rules, 2020. The proposed amendments
aim to bring transparency in the e-commerce platforms and further strengthen the
regulatory regime to curb the prevalent unfair trade practices. The proposed amendments
are as follows
To ensure
compliance of the Consumer Protection Act, 2019 and Rules, appointment of Chief
Compliance Officer, a nodal contact person for 24x7 coordination with law enforcement
agencies, officers to ensure compliance to their orders and Resident Grievance Officer
for redressing of the grievances of the consumers on the e-commerce platform, has
been proposed. This would ensure effective compliance with the provisions of the
Act and Rules and also strengthen the grievance redressal
mechanism on e-commerce entities.
Putting
in place a framework for registration of every e-commerce entity with the Department
for Promotion of Industry and Internal Trade (DPIIT) for allotment of registration
number which shall be displayed prominently on website as well as invoice of every
order placed the e-commerce entity. Registration of e-commerce entities would help
create a database of genuine e-commerce entities and ensure that the consumers are
able to verify the genuineness of an e-commerce entity before transacting through
their platform.
To protect
the interests of consumers, mis-selling has been prohibited
i.e selling goods and services entities selling goods
or services by deliberate misrepresentation of information by such entities about
such goods or services. To ensure that consumers are aware about the expiry date
of the products they are buying on the e-commerce platform all sellers on marketplace
e-commerce entities and all inventory e-commerce entities to provide best before
or use before date to enable consumers to make an informed purchase decision.
To ensure
that the domestic manufacturers and suppliers get a fair and equal treatment on
the e-commerce platform it has been provided that where an e-commerce entity offers
imported goods or services, it shall incorporate a filter mechanism to identify
goods based on country of origin and suggest alternatives to ensure fair opportunity
to domestic goods.
To ensure
that consumers are not adversely affected in the event where a seller fails to deliver
the goods or services due to negligent conduct by such seller in fulfilling the
duties and liabilities in the manner as prescribed by the marketplace e-commerce
entity, provisions of Fall-back liability for every marketplace e-commerce entity
have been provided.
The proposed amendments are available
on website of Dept of Consumer Affairs https://consumeraffairs.nic.insitesdefaultfilesfile-uploadslatestnewsComments_eCommerce_Rules2020.pdf and
views/comments/suggestions on the draft rules may be sent to js-ca@nic.in within
15 days (till 6th July, 2021).