e-Commerce: The New Boom

[pib] Amendments to the Consumer Protection (E-commerce) Rules, 2020


From UPSC perspective, the following things are important :

Prelims level: Consumer Protection (E-commerce) Rules, 2020

Mains level: Not Much

For the purposes of preventing unfair trade practices in e-commerce, the Central Government had notified the Consumer Protection (E-Commerce) Rules, 2020 with effect from 23 July 2020.

Consumer Protection (E-commerce) Rules, 2020

The proposed amendments aim to bring transparency in the e-commerce platforms and further strengthen the regulatory regime to curb the prevalent unfair trade practices.

The proposed amendments are as follows:

(a) Chief Compliance Officer

  • To ensure compliance of the rules, the appointment of Chief Compliance Officer, a nodal contact person for 24×7 coordination with law enforcement agencies, officers to ensure compliance to their orders and Resident Grievance Officer for redressing of the grievances of the consumers on the e-commerce platform, has been proposed.
  • This would ensure effective compliance with the provisions of the Act and Rules and also strengthen the grievance redressal mechanism on e-commerce entities.

(b) Registration of e-coms

  • Putting in place a framework for registration of every e-commerce entity with the DPIIT for allotment of a registration number which shall be displayed prominently on the website as well as invoice of every order placed by the e-commerce entity.
  • This would help create a database of genuine e-commerce entities and ensure that the consumers are able to verify the genuineness of an e-commerce entity before transacting through their platform.

(c) Prohibition of miss-selling

  • The goods and services entities selling goods or services by deliberate misrepresentation of information have been prohibited.

(d) Expiry dates

  • This would ensure that consumers are aware of the expiry date of the products they are buying on the e-commerce platform.
  • It compels all sellers on marketplace e-commerce entities and all inventory e-commerce entities to provide the best before or use before the date to enable consumers to make an informed purchase decision.

(e) Fair and equal treatment

  • It has been provided that where an e-commerce entity offers imported goods or services, it shall incorporate a filter mechanism to identify goods based on country of origin and suggest alternatives to ensure fair opportunity to domestic goods.

(f) Fall-back liability

  • This would ensure that consumers are not adversely affected in the event where a seller fails to deliver the goods or services due to negligent conduct by such seller in fulfilling the duties and liabilities.

Why need such an amendment?

It was observed that there was an evident lack of regulatory oversight in e-commerce which required some urgent action.

  • Manipulating search results: Moreover, the rapid growth of e-commerce platforms has also brought into the purview the unfair trade practices of the marketplace e-commerce entities engaging in manipulating search result to promote certain sellers.
  • Preferential treatment: This includes preferential treatment to some sellers, indirectly operating the sellers on their platform, impinging the free choice of consumers, selling goods close to expiration etc.
  • Flash sales: Certain e-commerce entities are engaging in limiting consumer choice by indulging in “back to back” or “flash” sales. This prevents a level playing field and ultimately limits customer choice and increases prices.

Check this PYQ from CSP 2012:

Q. With reference to consumer’s rights / privileges under the provision of law in India which of the following statements correct?

  1. Consumer are empowered to take samples for food testing
  2. When consumer fi les a complaint in any consumer forum, no fee is required to be paid.
  3. In case of death of consumer, his/her legal heir can file a complaint in the consumer forum on his/her behalf.

Select the correct answer using the codes given below:

(a) Only 1

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

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