The consumer protection (E-commerce) Rules, 2020 has been drafted by the Ministry of Consumer affairs, broadly with an objective to fastened the duties and liabilities of burgeoning e- commerce entities in the country and to safeguard the interest of the consumers, but off late e- commerce entities has raised alarm over the implementation of these rules and has expressed their concerns against them, unusually the government’s various departments also echoed their reservations against them, Industry department ,Corporate Affairs ministry, Department for Promotion of Industry and Internal Trade (DPIIT) has highlighted several anomalies and questioned some provisions.
The highlight of the Rules are as follows:
Firstly, Applicability, The Rules apply to all e-commerce retailers, whether or not registered in India or abroad, offering goods and services to Indian consumers.
Secondly, Registration, necessary registration for e- commerce entities with the Department of Promotion for Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
Thirdly, Appointment of nodal officer, E-commerce entity need to appoint a nodal person or an alternate senior designated functionary, resident in India to make sure compliance with the provisions of the act or rules.
Fourthly, Prices and expiry dates, The sellers through the e-commerce entities will have to display the total price of goods and services offered for sale along with the break-up of other charges. Also where applicable the expiry date of the good need to be separately displayed.
Fifthly, Country of origin and importer details, All relevant details about the goods and services offered for sale by the Seller including country of origin and in case of imported goods the name and details of the importer, and guarantees related to the authenticity or genuineness of the imported products need to be provided to enable the consumer to make an informed decision at the pre-purchase stage.
Sixthly, Grievance Redressal Mechanism, Marketplaces, as well as sellers, need to appoint a grievance officer who must acknowledge the receipt of complaints within 48 hours and redress the same within 1 month from the date of receipt of the complaint. Also, e-commerce entities need to provide ticket numbers for consumers to track their complaints.
Seventhly, Restriction on unfair trade practice, manipulation and discrimination, The Rules aims to restrict unfair trade practices in e-commerce and direct selling, Further, no e-commerce entity shall manipulate the price of goods or services to gain unreasonable profit or discriminate between consumers of the same class or make any arbitrary classification of consumers affecting their rights.
Eighthly, Should not post fake reviews or mislead, No seller or inventory e-commerce entity shall falsely represent itself as a consumer and post reviews about goods or services or misrepresent the quality or the features of any goods or services.
Ninthly, No cancellation charges, No e-commerce entity shall impose cancellation charges on consumers cancelling after confirming purchase unless similar charges are also borne by the e-commerce entity if they cancel the purchase order unilaterally for any reason.
Tenthly, Sellers should not refuse to take back goods, or withdraw or discontinue services if such goods and services are defective, deficient or spurious. Provided that in the case of late delivery, this condition shall not be applied if such late delivery was due to a force majeure event.
Eleventhly, Record information of sellers selling counterfeit products, E-commerce entities need to maintain a record of information for the identification of all sellers who have repeatedly offered goods or services that have previously been removed or restricted under the Copyright Act, 1957, the Trade Marks Act, 1999 or the Information Technology Act, 2000. However, the e-commerce entity is not required to terminate the access of such seller to its platform, but may do so on a voluntary basis.
Twelfthly, Flash Sales, They are kept under the check and the specific flash sales which limits consumer choice and prevent a level playing field are banned.
Thirteenthly, Restricting related parties, Related parties are restricted from selling their products on e-commerce platforms and this is to tackle the growing concerns of preferential treatment given by the e- commerce platforms to their related parties.
Fourteenthly, Access to government agencies, reporting of cyber security issues, all e- commerce entities must provide information to authorised government agencies, probing any breach of the law relating to cyber security issues, within 72 hours of any such request.
KEY DEFINITIONS:
• e-commerce entity means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity
• inventory e-commerce entity means an e-commerce entity which owns the inventory of goods or services and sells such goods or services directly to the consumers and shall include single brand retailers and multi-channel single brand retailers
• marketplace e-commerce entity means an e-commerce entity which make available an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers.
CONTENTIOUS POINTS IN THE DRAFT OF E-COMMERCE RULES
Restricting related parties from listing on the e- commerce platform: This has become the biggest pain point of the e- commerce entities, this restriction has been observed by some of the players as stifling the growing e-commerce market place, it means that associate enterprises of e-commerce entities cannot be listed as a seller on their platforms and this will potentially disrupt the functioning of present e-commerce market leaders like Amazon, flip kart, who have many of its related/associated parties listed as seller on its platform.
OBJECTIONS WITHIN THE GOVERNMENT
The finance ministry, the ministry of corporate affairs, and NITI Aayog have all raised objections.
NITI Aayog Vice-Chairman Rajiv Kumar went on to say that the proposed rules send the message of unpredictability in policy-making, and finance ministry has called the rules “excessive”, citing their woes that it had a ramification to hit a sector that could boost job creation and tax revenue, and further will be a stumbling block in ‘ease of doing business’.
The Ministry of Corporate Affairs has opposed the clause that says e-commerce firms should not abuse their dominant position in India, it had called the provision “unnecessary and superfluous”, it further stated that it is undesirable to introduce a mini-competition law regime under the garb of e-commerce rules.
CONCLUSION
The faction from within government giving its signals that these laws are act of going overboard and being perceived as ‘anti-industry’, the crack down on flash sales, making the buck stop on e-marketplaces for seller violations and these all issues are now been raised by industry leaders in the segment and other big corporate groups who are venturing into this tempting e-market place have also raised their voices, which are finding resonance within few factions of the government but trade bodies like the Confederation of All India Traders has firmly backed the new Rules citing its utility in keeping check on the bigger players conduct in the e-commerce genre to not affect the opportunities to grow for small traders, it is in the larger interest to address all the concerns of all ministries and stakeholders in formulating a rules.
Rishesh Sikarwar is an advocate practicing before the Supreme Court of India