Home Speak to a lawyer Meet a lawyer Flat fee services About Blog Careers Contact Us Terms & Conditions Privacy Policy Legal Topics
Tougher rules for the E-Commerce Industry
Recent Post

Get Legato App on your mobile.

Tougher rules for the E-Commerce Industry

Online shopping is the new normal for everyone. Now that the deadly virus has hit the country, there has been a shift in the consumer of the practice of purchasing online as it’s much easier and convenient. After the ban of 59 Chinese apps by the Indian government, the Indian people are now dependent on Amazon, Flipkart etc. E-commerce is majorly used by the people as it allows a consumer even to return the product easily when the product is defective or unsatisfactory.

The initiative is taken to bring the digital economy of India at a higher position by introducing several norms and rules that will help in giving better competition and products in the Indian market. However, an official gazette for the same is yet to be released, but the implications and changes have to be made by the online platforms at the earliest.

The Consumer Protection Act, 2019, which replaced the old rules of Consumer Protection Act, 1986 has also taken into consideration of the e-commerce industry. According to the Ministry of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan, new guidelines for e-commerce will be released in the coming week for better redressal and communication with the consumers. The e-commerce platforms are required to setup a robust consumer redressal mechanism as part of the rules under the Consumer Protection Act, 2019 that is effective from July 20, 2020. Through the help of video conferencing, Ram Vilas Paswan also informed about the new rules and incoming guidelines that will be effective from the next week.

Changes in the Structure

As per the new rules for Consumer Protection Act, 2019, the e-commerce entities will be required to provide every detail to its consumer. The platform is required to give details regarding the return, refund, exchange, guarantee and warranty, delivery and shipment, modes of payment a consumer can pay through, a grievance redressal mechanism, security of payment methods, and also information about chargeback options if available.

For a better decision making of the purchaser, the online entities are required to mention the country of origin for every product so that the consumer is informed about the originality of the product before purchasing it.  Under the new Act formulated, a receipt has to be acknowledged by the online entities for any consumer complaint is essential within forty-eight hours and the complaint has to be redressed within a month from the date of the receipt. The e-commerce entity is also responsible to appoint a grievance officer for consumer grievance redressal.

Mandatory Rules and not just Norms

The most important thing is that these rules are not merely advisories, but are mandatory for every online business that are happening through e-commerce. It is the first time that such tougher rules have been introduced by the government regarding e-commerce entities.

Apart from all this, the shoppers can get relaxed as the new rules mention that, charging cancellation fees from the consumer when he/she cancels the order after purchasing it is wrong and is not permitted under the new Act. If the sellers tend to do so, then they are required to pay the similar charges to the purchaser too, when the seller cancels the order unilaterally for any reason which will be notified in the official gazette once released. When communicated with the e-commerce executives, they informed that such change will give “better defined” legal power to the consumers to go and fight against the counterfeit products or any other grievances in the court.

A difference in the new proposed model is also explained between the marketplace model and inventory model. In a marketplace model, all the goods are listed and sold by the third-party, whereas in an inventory model, the platform stocks goods and then sell online. 

The new draft of rules under Consumer Protection Act, 2019 also mentions that “Any inventory e-commerce entity which explicitly or implicitly vouches for the authenticity or reality of the goods and services sold by it, or guarantees that such goods and services are authentic is requested to bear appropriate liability in any action related to the authenticity of such good or service.”

Perfect competition should be followed, and there should be no manipulation of the prices by the e-tailers or sellers in the market. The sellers are also requested to not refuse to take back goods, discontinue services or stop refunds if the products are found to be defective, fake, delivered late or looked entirely different from description on the platform.

As snapdeal is one of the major online running businesses, its executive came forward and spoke about how these new rules for consumer protection will help in healthy business of e-commerce and as well as safeguard the interest of the consumers. He further mentioned, “While we are in the process of examining the provisions of the Consumer Protection (E-Commerce) Rules 2020, Snapdeal is fully supportive of all measures that enhance protection for the consumers, provide a level playing field to sellers and enable healthy growth of the e-commerce sector in India.”

Conclusion

Recently, the ban of dozens of apps of the Chinese technology has made the government reluctant about the rules and norms that every e-commerce platform has to adhere to if they want to trade their market in India. The issuance of fresh guidelines by the government under the Consumer Protection Act, 2019 is a step towards making the consumer the king even in the online commerce domain. Such guidelines will help in to invoke healthy competition in the market with a sense of accountability and trust provided to the consumers.

According to recent reports, one out of every four-member is the consumer who buys a product online and therefore; it was the need of the hour to bring in such norms and rules that eliminate counterfeit products from the market and also encourages speedy redressal of consumer grievances.

Shoppers can now expect to get their life easier when the online platforms would implement these norms in serving a consumer.

All Comments