Consumer Affairs Ministry seeks feedback on proposed amendments to e-comm rules

Our Bureau New Delhi | Updated on June 21, 2021

Plans to tighten norms, mandate registration with DPIIT

The Consumer Affairs Ministry has proposed to amend the Consumer Protection (E-Commerce) Rules 2020 making it mandatory for e-commerce entities to register with Department for Promotion of Industry and Internal Trade (DPIIT), tighten country-of-origin norms for imported goods, as well as for flash sales, among other provisions.

It has sought public comments on these proposed amendments till July 6.

According to the proposal, every e-commerce entity operating in India will need to register with DPIIT and ensure that the registration number is displayed prominently on its platforms.

With regards to imported goods and services, it stipulates that name and details of the importer from whom goods have been purchased or seller needs to be mentioned and also goods should be identified based on their country of origin at the pre-purchase stage. It has also proposed that e-tailers should suggest domestic goods alternatives for imported products at the time goods are being viewed for purchase by consumers besides providing ranking for goods and ensuring that the ranking parameters do not discriminate against domestic goods and sellers.

Flash sales

The proposal also stipulates that e-commerce firms will not be able to conduct flash sales on their platform, if it is conducted with an intent to enable only a specified seller or group of sellers to sell goods and services and fraudulently intercepting the ordinary course of business using technological means.

Fall-back liability

“No e-commerce entity shall indulge in mis-selling of goods or services offered on its platform. An e-commerce entity which is engaged in cross-selling of goods or services shall provide adequate disclosure ( name of entity providing data for cross-selling and data of such entity used for cross-selling) to its users displayed prominently in a clear and accessible manner on its platform,” it stipulates. “A marketplace e-commerce entity shall be subject to a fall-back liability where a seller registered on its platform fails to deliver the goods or services ordered by a consumer due to negligent conduct, omission or commission of any act by such seller in fulfilling the duties and liabilities in the manner as prescribed by the marketplace e-commerce entity which causes loss to the consumer,” it added.

They will also need to ensure that related-parties and associated enterprises are not listed as sellers and e-commerce firms also cannot sell to a registered seller. At the same time, e-commerce firms will need to ensure that sponsored listing of products and services are distinctly identified with clear and prominent disclosures, the proposed amendments stated.

E-commerce firms will also need to appoint Chief Compliance Officer for ensuring compliance with the Consumer Protection Act and Rules, a nodal contact person for co-ordination with law enforcement agencies and a Resident Grievance Officer. The name and contact number of grievance officer and mechanism of grievance redressa will need to be to prominently displayed on the platform and this officer will receive and acknowledge any order, notice or direction issued by the government or authorities, it stipulates.

Archana Tewary, Partner, J Sagar Associates said, “By requiring e-commerce entities to register with the DPIIT and appoint a chief compliance officer, nodal officer and grievance officer who are citizens of (and resident in) India, the proposed rules seek to hold e-commerce entities which operate in India accountable.”

“The proposed rules also seek to mandate the sharing of information by e-commerce entities with governmental authorities within 72 hours. Further, the proposed rules require e-commerce marketplaces to ensure that none of its related parties and associated enterprises are enlisted as sellers for sale to consumers directly - the definition of associated enterprises also seems to be wide. These changes are wide-ranging and will have significant implications,” she added.

Welcoming the new proposals, Confederation of All India Traders said that this is being construed as the first logical step of the government to create a level playing field.

Published on June 21, 2021

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