E-commerce rule changes to increase accountability: government

The Consumer Ministry said the provision of mandatory registration for e-commerce entities in the proposed amendment to the 2020 E-Commerce Consumer Protection Rules is intended to empower and encourage real players in the space. of electronic commerce.

Speaking to the media, Nidhi Khare, additional secretary of the Department of Consumer Affairs, said on Tuesday that the ban on back-to-back fraudulent flash sales was being introduced as a provision allowing consumers to bring complaints against unfair business practices.

Finding public views

The ministry introduced the proposed changes on Monday, seeking public comment. In the changes, he proposed to tighten the country of origin standards for imported goods, to prevent flash sales, abuse and cross-selling induced by predatory pricing. It also proposes to introduce the concept of fallback liability on market e-commerce entities and tighten standards to prevent preferential treatment of related parties and private labels, among other provisions.

Khare said conventional flash sales would not be affected and explained that the proposed changes refer to a ban on such back-to-back flash sales when a particular seller who has no inventory or order fulfillment capacity places fraudulently a “flash or back-to”. -back “order from another seller controlled by the e-commerce platform.” So consumers have a very limited choice and this also makes other businesses, especially MSMEs uncompetitive … Sometimes shell companies , which are controlled by the e-commerce market, are trained to carry out these activities, ”she added.

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“We’re not saying we’re going to start investigating every flash sale or regulating every flash sale. We are not asking for any disclosure from companies about flash sales. The objective is to introduce a provision allowing consumers to lodge a complaint if they believe they have been cheated, ”she added.

Ministry officials pointed out that the changes were proposed to protect the interests of consumers, and not to regulate the commerce of e-commerce entities, as this falls under the purview of the Department of Industry Promotion and Domestic Trade.

Regulatory landscape

Experts pointed out that the proposed changes envision a significant upheaval in the regulatory landscape of India’s growing e-commerce industry and will pose operational challenges for the industry.

Ankur Pahwa, National E-Commerce Industry Leader, EY India, said, “While regulations are certainly needed to govern the e-commerce channel, they need to be designed holistically and holistically, be consistent in their application to different retail channels and finally be governed. by a single law against various regulations and notifications.

Nakul Batra, Associate Partner at DSK Legal, said: “Greater liability of e-commerce entities has been proposed by referring to the provisions of the Competition Law of 2002, introducing the concept of related party and associated companies. , fallback responsibility, etc. e-commerce entities to reassess their business models. Additional compliance has also been imposed on e-commerce entities in terms of appointing a compliance officer, disclosures of imported goods or services, cross-selling, sponsored referrals, etc. 2021 IT rules. “

Supratim Chakraborty, partner at Khaitan & Co, added: “The amendment to the e-commerce rules proposed to give consumers the opportunity to provide their express and affirmative consent with regard to the sharing of their data collected by the platform. form of electronic commerce. Such consent cannot be obtained through mechanisms such as pre-ticked boxes. While this may pose operational challenges for e-commerce platforms, the government is ready to make this compromise, in order to ensure that e-commerce platforms can be held accountable for its growing consumer base in India. “

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