From the Viewsroom

Regulating e-commerce business

Tina Edwin | Updated on November 15, 2019 Published on November 15, 2019

The draft rules are ambiguous on issues such as discounts

The traders’ association is pleased with the draft e-commerce rules, The Consumer Protection (e-commerce) Rules, 2019, issued by the Department of Consumers Affairs earlier this week. They reckon such rules will curb the so-called malpractices of e-commerce companies that are intended to destroy the domestic trade and mislead consumers. There is no denying that the proposed rules seek to bring transparency in the delivered price of products bought on an e-commerce platform, set out refund rules, and require sellers to be responsible for warranty and guarantee of the goods and services sold and also provide upfront information on the exchange, returns and refund process.

The obligations on e-commerce companies to process and effect refund requests of customers within 14 days and remove the listing of sellers found selling fakes will ensure that counterfeit products are not sold on their platform.

However, many clauses of the draft rules are ambiguous, short on definitions and open to interpretation. For instance, an e-commerce entity has been defined in the draft rules, but e-commerce as a business has not been defined. That definition appears in the press notes on FDI in e-commerce but has not been referenced in the draft rules of the Consumer Affairs Department. There is also a perception from the reading of the draft rules that the government is attempting to put pricing curbs on e-commerce entities with foreign equity. However, the government’s position on the level of discounts that e-commerce platforms offer from time to time is not clear. The rules state that e-commerce entities shall maintain a level-playing field and not influence prices directly or indirectly. One view is that this specific rule would apply only to platforms that follow the marketplace model, and by implication to the ones that have some element of foreign ownership, although the rule does not state that explicitly. Under the current FDI rules, e-commerce platforms that have foreign investment can only follow the marketplace model.

Senior Deputy Editor

Published on November 15, 2019
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