Government releases new draft guidelines for ecommerce sites

Ecommerce companies cannot influence prices of products being sold on their platform and must adhere to fair trade practices, as per the draft rules proposed by the Consumer Affairs Ministry.

The ministry has issued draft 'The Consumer Protection (e-Commerce) Rules, 2019 and sought comments on the same by December 2. The ministry has to frame rules under the Consumer Protection Act, 2019, which has recently been passed by Parliament.

Traders' body CAIT has welcomed the draft rules and said the proposed framework will "force" ecommerce companies to be more transparent and accountable towards customers.

As per the draft, an ecommerce entity should not "directly or indirectly influence the price of the goods or services" and "maintain a level-playing field".

It should not "adopt any trade practice which for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, or composite supply, adopts any unfair methods or unfair or deceptive practice that may influence transactional decisions of consumers in relation to products and services".

As per the draft rules, ecommerce players have been prohibited to falsely represent themselves as consumers and post reviews, misrepresent or exaggerate the quality or the features of goods and services.

The ecommerce entities will also have to furnish details about sellers, including the identity of their business, legal name, principal geographic address, name of the website, the products they sell, and how they can be contacted by customers.

According to the draft, ecommerce companies will have to protect personal data and information of the customers. An ecommerce entity should "ensure that personally identifiable information of customers are protected and that such data collection and storage and use comply with provisions of the Information Technology (Amendment) Act, 2008."

Another provision will entail ecommerce companies to accept the return of goods, if delivered late, or if the product is defective, wrong or spurious. They should affect all payments towards accepted refund requests of the customers within a period of a maximum of 14 days, it added.

The proposal also asks ecommerce companies to display terms of contracts with the sellers relating to return, refund, exchange, warranty/guarantee, delivery/shipment, mode of payments, grievance redressal mechanism etc. to enable consumers to make informed decisions.

Terming the move as a positive step, CAIT Secretary General Praveen Khandelwal said the proposed rules will "certainly force the ecommerce entity to be more transparent and impartial and accountable towards consumers".

"...the Consumer Affairs Ministry has to ensure that ecommerce companies should follow the rules not only in letter but in spirit as well. We have seen that in spite of FDI policy in place, the e-commerce companies remain violative of the policy right under the nose of the government," he added.

Interestingly, Internet and Mobile Association of India has - in its submission - said the proposed model framework will cause "unnecessary compliance burden" for online shopping companies and negatively impact the ease of doing business in India.