Business Laws

ONDC: Pathbreaking, but some unanswered questions 

Updated on: May 23, 2022

The platform was set up to create a level playing field for smaller businesses

The Open Network for Digital Commerce (ONDC), an open protocol network where buyers and sellers can freely participate and do business, is a pathbreaking initiative of the Ministry of Commerce. Following the release of a ‘strategy paper’ on January 28, 2022, a test run has been launched in five cities – Delhi, Shillong, Bengaluru, Bhopal and Coimbatore. ONDC is very helpful, but experts have observed that several legal aspects still need addressing.  

Because any buyer and seller can get on to the platform – sellers can download their applications and buyers can browse all through a single bar, ONDC can get small brick and mortar stores onboard. This, indeed, has been said to be the unspoken objective behind ONDC. If a small business opens its own online portal, who will log into it to buy anything? But now, he has the option of getting on to ONDC, where everyone is level.  

Or is it? That is the question that some experts have raised.  

The grey areas

Writing in Mondaq, experts at the law firm, L&L Partners, observe that this framework is intended to be a clear departure from the closed network of e-commerce that is existent as of now, where a seller is required to get listed on various different e-commerce platforms, and the buyers have to browse through different e-commerce platforms, in the search of a single item. 

Thus, ONDC is a very useful initiative, but that said, there are some grey areas.

For instance, experts have expressed concern over a scenario when ONDC does registration not get enough number of e-commerce platforms. This could happen, because while the big players might regard ONDC as a competitor, the small and local ones might need technical support to join in. Further, can the small businesses stand the onslaught of discounts and other offers that the big players give? 

Payment methods

L&L Partners experts, in their article, point to further complications. “Some payment related issues can also arise as different e-commerce platforms might not offer all kinds of payment methods, and this can frustrate a consumer even more, if he is employing a vendor and a logistics/delivery partner, for a single transaction through ONDC.” 

The question of liability

They note that the “biggest concern of it all” could well be the issue of liability. In case of a consumer facing any issue regarding the transaction or the quality of products or services delivered, whose liability will it be?

As it remains unclear as to how various e-commerce laws will apply to ONDC, and how ONDC fits into the entire legal landscape of e-commerce in India, the issue of liability of ONDC, remains open and unanswered. 

Published on May 22, 2022
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