New e-commerce rules provide clarity on responsibilities of marketplaces\, sellers: Industry execs
NEW DELHI:
New
rules for
e-
commerce entities, including mandatory display
of 'country
of origin'
on products,
provide
clarity
on the
responsibilities
of
marketplaces as well as sellers and will enhance protection for buyers, industry executives said
on Friday.
The 'Consumer Protection (
E-
Commerce)
Rules, 2020' were notified
on Thursday. It will be applicable to all electronic retailers (e-tailers) registered in India or abroad but offering goods and services to Indian consumers. Violation
of the
rules will attract penal action under the Consumer Protection Act, 2019.
"These (
new
rules) will enhance protection for online buyers in India. The
new
rules also clarify the distinct scope
of
responsibilities between the marketplace platform and the sellers
on the
marketplaces," a Snapdeal spokesperson said.
The spokesperson also said that this
clarity in law making will help in effective enforcement
of these laws and in creating an ease
of doing business environment for
e-
commerce
marketplaces, while protecting the interests
of consumers.
An Amazon spokesperson said the company is examining the consumer protection
rules that are applicable to the sector and will comply with them.
Flipkart and Paytm Mall did not respond to e-mailed queries.
Industry body IAMAI said the
rules correctly understand that there are two different models
of e-tailing -- inventory-based and online marketplace -- that require different levels
of direct responsibility to consumers.
"Recognition
of online
marketplaces as 'intermediaries' thus helps absolve them
of certain product liabilities, which now rightly lie with sellers conducting their business
on such platforms.
"Sellers are now mandated to take responsibility for 'goods or services that are defective, deficient or spurious' and cannot refuse to take back such goods," the Internet and Mobile Association
of India (IAMAI) said.
The
new
rules also mandate that
marketplaces as well as sellers would be required to have grievance officers who have to respond in a time-bound manner.
An industry executive, who did not wish to be named, said the requirement for sellers to appoint a grievance officer will increase the burden
on a small seller, thereby requiring investment in terms
of costs and time (spent
on interacting with customers).
IAMAI said the
new
rules, in particular, do justice to the concerns
of online
marketplaces about the earlier liabilities for counterfeit products, which now rightly lie with the sellers conducting business
on these platforms.
"Platforms now are mandated to make 'reasonable efforts to maintain a record
of relevant information' that allow identifying sellers who are repeat offenders for offering spurious goods.
"Furthermore, platforms are now no longer mandated to take corrective actions and can off-board such sellers
on a 'voluntary basis'," it added.
The association also highlighted the need for an extension
of application
of the
rules from its present mandate
of date
of notification since logistics services are still settling in under COVID-19 challenges and changing/ re-coding platforms to implement some
of the
new provisions will take time.
According to the
new
rules, the
e-
commerce players will have to display the total price
of goods and services offered for sale along with break-up
of other charges. They are also required to mention the 'expiry date'
of goods offered for sale and the 'country
of origin'
of goods and services that are necessary for enabling the consumer to make an informed decision at the pre-purchase stage.
E-
commerce players have to display details about return, refund, exchange, warranty and guarantee, delivery and shipment, modes
of payment, and grievance redressal mechanism, and any other similar information that may be required by consumers to make informed decisions.
Sellers offering goods and services through a marketplace
e-
commerce entity will have to
provide the above details to the
e-
commerce entity to be displayed
on its platform or website.
The
new
rules do not permit any inventory
e-
commerce entity, including single-brand retailers and multi-channel single-brand retailers, to "falsely represent itself as a consumer and post reviews about goods and services or misrepresent the quality or the features
of any goods and services".
The inventory
e-
commerce entities will also have to ensure that the advertisements for marketing
of goods and services are consistent with the actual characteristics, access and usage conditions
of such goods or services.
Under the
new
rules, no inventory
e-
commerce entity will be allowed to refuse to take back goods or withdraw or discontinue services purchased or agreed to be purchased, among others, subject to various conditions.
On July 20, Consumer Affairs Secretary Leena Nandan had said
rules have been finalised after taking inputs from the Department for Promotion
of Industry and Internal Trade (DPIIT), under the aegis
of the commerce ministry, so that they do not contravene with the overall
e-
commerce policy.