Finance
By: Shree1news, 21 JUN 2021
The Centre on Monday proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020 and sought public comments on banning fraudulent flash sales and mis-selling of products and services on e-commerce platforms, and also on making registration of these entities mandatory with DPIIT. Ban on misleading users by manipulating search outcomes, and appointment of chief compliance officer and resident grievance officer are some of the other amendments being proposed.
E-commerce entities are also required to provide information not later than 72 hours of the receipt of an order from a government agency for prevention, detection and investigation and prosecution of offences under any law, as per the proposed amendments.
The Consumer Protection (E-Commerce) Rules, 2020 had been first notified in July last year. Their violations attract penal action under the Consumer Protection Act, 2019. “Views/ comments/ suggestions on the proposed amendments may be sent within 15 days (by July 6, 2021) by email to js-ca@nic.in,” Anupam Mishra, joint secretary in the consumer affairs ministry, mentioned in a public notice. Separately in a statement, the government mentioned following the notification of the e-commerce rules, it has received a number of representations from aggrieved consumers, traders and associations “complaining against widespread cheating and unfair trade practices being noticed in the e-commerce ecosystem.”
Among the key amendments, the government has proposed a ban on mis-selling of goods and services offered on such platforms. Those engaging in ‘cross-selling’ will have to provide adequate disclosures to users displayed prominently. The government also seeks to ban ‘flash sales’ on e-commerce platforms “if such sales are organised by fraudulently intercepting the ordinary course of business using technological means with an intent to enable only a specified seller or group of sellers managed by such entity to sell items or services on the platform.”
However, the ministry clarified, “Conventional e-commerce flash sales are not banned. Only specific flash sales or back to back sales which limit customer choice, increase prices and prevent a level playing field are not allowed.”
It also mentioned conventional flash sales by third-party sellers are not banned on e-commerce platforms. “…certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller selling on platform does not carry any inventory or order fulfilment capability but merely places a ‘flash or back to back’ order with another seller controlled by platform,” it mentioned.
Such sales will not be allowed as this prevents a level playing field and in the end limits buyer alternative and will increase costs, the ministry added. The proposed modification defines ‘flash sale’ as that organised by an e-commerce entity at considerably decreased costs, excessive reductions or another such promotional provides for a predetermined time frame.
Cross-selling means sale of products/providers that are associated or complimentary to a purchase made by a client at a time from any e-commerce entity with an intent to maximise the revenue of such entity. ‘Mis-selling’ means an e-commerce entity selling goods/services by deliberate misrepresentation of information. The government mentioned it will not enable e-commerce entities that hold a dominant position to abuse its position.
On registration of entities, the government has proposed that each e-commerce entity which intends to function in India has to register itself with the Department for Promotion of Industry and Internal Trade (DPIIT) within such a period as prescribed by DPIIT for allotment of a registration number. At present, e-commerce entities are registered under the Companies Act, Indian Partnership Act or Limited Liability Partnership Act and not separately with DPIIT.
The government has proposed that e-commerce entities should be sure that such registration numbers and bill of orders are displayed prominently to its customers in a clear and accessible manner on its platform. It has also proposed a ban on display and promotion of misleading ads. E-commerce entities offering imported goods/services will also have to mention the name and details of the importers and the ‘country of origin’.
Apart from, it has proposed ‘ranking’ for goods and services offered on the platforms whereas ensuring that the rating parameters do not discriminate against domestic goods and sellers. To make sure that consumers are aware about the expiry date of the products they are buying on the e-commerce platform, all sellers will have to mention ‘best before or use before date’ to enable consumers to make an informed purchase decision.
To make sure that the domestic manufacturers and suppliers get a fair and equal treatment on the e-commerce platform, it has been proposed that the place an e-commerce entity provides imported goods or services, it shall incorporate a filter mechanism to identify goods based on country of origin and suggest alternatives.
The government has also proposed ‘Fall-back liability’ for every marketplace e-commerce entity in order to be sure that consumers are not adversely affected in the event where a seller fails to deliver the products or services because of negligent conduct by such seller in fulfilling the duties in the manner as prescribed by {the marketplace} e-commerce entity. Based on the ministry, the proposed amendments aim to bring transparency in e-commerce platforms and further strengthen the regulatory regime.
Source:A-N
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