REASONS FOR REVISION
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The government has received several complaints against widespread cheating and unfair trade practices being observed in the e-commerce ecosystem
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Conventional e-commerce flash sales are not banned. Only specific flash sales or back-to-back sales which limit customer choice, increase prices and prevents a level playing field are not allowed.
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To protect the interests of consumers and encourage free and fair competition in the market, the Government is sharing a draft of the proposed amendments to the Consumer Protection (E-commerce) Rules, 2020.
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Proposed amendments aim to bring transparency to e-commerce platforms and further strengthen the regulatory regime.
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Views comments suggestions sought on the amendments to Consumer Protection (E-commerce) Rules, 2020 within 15 days (by 6th July 2021)
HIGHLIGHTS OF DRAFT
(A) Grievance Redressal Mechanism
E-commerce marketplace entities will have to put in place an effective grievance redressal system. Under the grievance redressal system, the e-commerce platform will have to provide all information relating to a seller including his address on request after a sale to aid dispute settlement resolution.
A grievance redressal mechanism has to be put in place by the e-commerce entity along with appointing a resident grievance officer who is an Indian citizen. The coordinates of the grievance officer have to be put up on the website. The e-commerce firms must-have mobile apps along with a mechanism for users to make complaints against violation of the provisions of the rules and other matters.
(B) Exemption of the E-Commerce
“A marketplace e-commerce entity which seeks to avail the exemption from liability under sub-section (1) of section 79 of the Information Technology Act, 2000 (21 of 2000) shall comply with sub-sections (2) and (3) of that section, including the provisions of the Information Technology (Intermediary Guidelines) Rules, 2011,” the e-commerce rules say. Section 79 of the IT Act grants an IT intermediary exemption from any liability if it “observes due diligence while discharging his duties… and also observes such other guidelines as the Central Government may prescribe”. The protective cover disappears if the intermediary conspires, abets, aids or induces the “commission of an unlawful act”.
The draft law also says that every marketplace e-commerce entity shall include in its terms and conditions governing its relationship with sellers on its platform, a description of any differentiated treatment which it gives or might give between goods or services or sellers in the same category.
(C) Chief Compliance Officer
E-commerce firms will now have to appoint a chief compliance officer who shall be responsible for ensuring legal compliance and is liable for any proceedings related to any relevant third-party information, data or communication link made available or hosted by an e-commerce entity.
The compliance officer has to be a resident Indian citizen. The companies also have to appoint a nodal contact person for 24×7 coordination with the law enforcement agencies and officers to ensure compliance with their orders.
(D) End of the practice of flash sale
The revised draft, released for stakeholder consultations, will define ‘cross selling’, ‘fall-back liability’, ‘flash sale’, ‘mis-selling’, among others, to avoid misrepresentation. It proposes to end the practice of flash sale and distinct identification of a sponsored list of products displayed on the e-commerce platform. It will also make registration with the Department for Promotion of Industry and Internal Trade (DPIIT) mandatory for all e-commerce entities.
(E) Non-usage of Information
It is also proposed that e-commerce entities will not use any information collected through its platform for the unfair advantage of its related parties and associated enterprises. The related parties and associated enterprises have also been prohibited from enlisting as sellers for sale to consumers directly.
