The Draft E-Commerce Guidelines For Consumer Protection, 2019: An Analysis

Introduction:

On August 2, 2019, the Draft E-Commerce guidelines for Consumer Protection, 2019 was introduced by the Ministry of Consumer Affairs known as Consumer Protection (E-Commerce) Rules, 2019. The purpose for introducing this guidelines is to prevent fraud, check unfair trade practices by e-commerce entities and protecting the legitimate rights and interest of the consumers.

 

Applicability:

This Guidelines is applicable only to Business to Consumer (B2C) e-commerce entities and also include entities offering digital contents. This Guidelines is not applicable to Business to Business (B2B) e-commerce entities.

 

Key features of the Draft E-Commerce Guidelines For Consumer Protection, 2019:

Conditions on E-Commerce entities for carrying business in India:

  • must be registered as legal entities under Indian laws;
  • must certify compliance with this guidelines;
  • must not promoted or managed by any person convicted of any criminal offence which carrying punishment of five years imprisonment by any court of competent jurisdiction;
  • must comply with the provisions of Information Technology (Intermediaries Guidelines), Rules, 2011;
  • e-commerce entities may facilitate the payment for sale but must in conformity with the guidelines of the Reserve Bank of India;
  • must provide details of seller on their platforms in clear and transparent manner like their legal name, contact details, principle geographic address, name of their website, the products which they sell, etc.

 

Liabilities of E-Commerce entities:

  • they can not directly or indirectly influence the price of the goods and services and they have to maintain level playing field;
  • they can not adopt any trade practices or methods that are deceptive and influence the transactional decisions of the consumers like they falsely represent themselves as consumers and post reviews about goods and services, and in advertisement, they misrepresent or exaggerate the quality of goods and services, all these methods are prohibited under this guidelines;
  • they must have to take action against the sellers who counterfeit the products on their platform. Here is an example, to eliminate the counterfeit products, Amazon has launched “Project Zero” initiative in India;
  • they must have to provide clear terms of contract between e-commerce entity and seller to enable consumers which is related to return, refund, exchange, warranty/guarantee, delivery/shipment, mode of payments, grievance redressal mechanism, etc.
  • they must have to mention safety and heath care information of the goods and services which are advertise for sale like the details of manufacturing and expiry date, quantity of materials which were added in goods, etc.
  • they must have to provide information on available payment methods, the security of those payment methods, how the methods can be used and how the regular payments can be cancelled such as subscription under those methods;
  • they must have to ensure that information of the customers which are personally identifiable are protected and such data collection, storage and use comply with the provisions of Information Technology (Amendment) Act, 2008;
  • they must have to return the products in case of late delivery, products are in defective conditions, products which are delivered are wrong products and they must have to refund within a fixed timeline.

 

Liabilities of Sellers:

Sellers who are advertising or selling their products on an e-commerce platform also have to follow this guidelines:

  • they must have to take the responsibility of warranty and guarantee of the goods and services;
  • they must have to provide upfront information regarding the exchange, return and refund process;
  • they must have to display single-figure total and break up price for the goods and services, inclusive of all compulsory charges.

Consumer Grievance Redressal:

  • E-Commerce entities have to appoint Grievance Redressal Officer who shall redress the complaints within time line;
  • E-Commerce entities provide facilities to the consumers to register their complaints via phone, email,website and also provide complaint number for tracking their status.

 

Drawbacks of the Draft E-Commerce Guidelines For Consumer Protection, 2019:

  • This guidelines increases the burden on e-commerce entities like they have to comply with the many provision other than the Consumer Protection Act, 2019. This guidelines created the perception that the government is attempting to take the pricing control from the hand of the e-commerce entities even if they are not creating any circumstances which leads to predatory price and this act of government is against the principle of free market and there is no clarity on the level of government control and this guidelines also shows bias against foreign companies and it may affect the employment of Indians, hence it created a negative impact on the business of e-commerce entities. .
  • In this guidelines/rules, there are many clauses which are not clearly defined, having short definitions and open to interpretation which means definitions are not exhaustive. For example in this guidelines/rules definition of an e-commerce entity is defined but definition of e-commerce as a business is not defined.
  • Even after the enactment of the Consumer Protection Act, 2019, this guidelines still uses Consumer Protection Act, 1986. And the Consumer Protection Act, 1986 is repealed by the Consumer Protection Act, 2019.

 

Other steps taken by the Government to regulate E-Commerce:

  • On 23rd February 2019, draft National E-Commerce policy was released by the Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry and the purpose for releasing this policy was to set up a legal and technological framework for issues like data ownership, anti-counterfeiting measures, digital economy, cross-border data flow, etc.
  • Government laid down FDI rules for e-commerce to regulate the operations of marketplaces. In this rule, an e-commerce entity can not buy more than 25% of inventory from single vendor. In this rule also e-commerce marketplaces were not free to offer deep discounts.

 

Conclusion:

In this vast era, there is rapid increase in the field of e-commerce and this leads to the increase in the number of consumer grievances. There are many platforms were consumer faces problem while purchasing goods, platforms like Flipkart, Amazon, etc. and there are many platforms where consumers faces problems while availing services, platforms like Zomato, Swiggy, MakeMy Trip, etc. and looking all these problems the guidelines trying to transform the jurisprudence prevailing consumer protectionism from caveat emptor (let the buyer beware) to caveat venditor (let the seller beware).

 

Suggestions:

  • To address all aspects of e-commerce, a single legislation should be enacted, so that burden on the e-commerce entities to comply with many provisions of different rules and acts will decrease.
  • An independent regulator must be set up to deal with the issues related to the Foreign Direct Investment implementation, issues related to the protection of consumers, etc.
  • Set up an accreditation system for critical examination of e-commerce platforms which adhere to good business practices.

 

.- Kajal Kumari

Galgotias University

  8th Semester

 3rd Position in Article Writing Competition