Consumer affairs min issues draft consumer protection e-Commerce rules 2020

An e-commerce entity which is engaged in cross-selling of goods or services shall provide adequate disclosure to its users displayed prominently in a clear and accessible manner on its platform.

The consumer affairs ministry on Monday issued a set of new draft Consumer Protection (E-commerce) Rules 2020 that proposes to bar e-commerce companies from allowing any display or promotion of misleading advertisement on their platforms. The amended rules state that no “e-commerce entity shall organise a flash sale of goods or services offered on its platform.” Besides, companies which hold a “dominant position in any market” will not be allowed to abuse its position.

The government has sought suggestions and comments from stakeholders on the proposed amendments by July 6.
As per the draft norms, e-commerce firms that offer imported goods or services for sale will have to ensure that the name and details of any such importer is mentioned.

Companies will be directed to identify goods based on their country of origin, “provide a filter mechanism on their e-commerce website and display notification regarding the origin of goods at the pre-purchase stage, at the time of goods being viewed for purchase, suggestions of alternatives to ensure a fair opportunity for domestic goods”.

If the rules are finalised, e-commerce companies will have to appoint a chief compliance officer, nodal contact person for 24×7 coordination with law enforcement agencies and a resident grievance officer. Every company which intends to operate in India will also have to register itself with the DPIIT (Department for promotion of industry and internal trade) “within such period as prescribed by DPIIT for allotment of a registration number”.

“No e-commerce entity shall indulge in mis-selling of goods or services offered on its platform. An e-commerce entity which is engaged in cross-selling of goods or services shall provide adequate disclosure to its users displayed prominently in a clear and accessible manner on its platform,” according to the rules.

For marketplace e-commerce entities in particular, the rules suggest that such firms shall not sell goods or services to any person who is registered as a seller on their platforms. “No marketplace e-commerce entity shall advertise a body of sellers for the purpose of subsidising a sale on its platform…the entity shall be subject to fall-back liability where a seller registered on its platform fails to deliver the goods or services ordered by a consumer,” as per the rules.