Draft rules for e-commerce companies proposed

The government has proposed changes to the e-commerce rules under the Consumer Protection Act, 2019 to make the operation framework more stringent.

Context

The government has proposed changes to the e-commerce rules under the Consumer Protection Act, 2019 to make the operation framework more stringent.

About proposed changes in the e-commerce rules

• The rules are issued by the Ministry of Consumer Affairs.
• These rules are proposed to change the Consumer Protection (e-commerce) Rules 2020.

Key changes

• The rules seek to ban “specific flash sales” by e-commerce entities.
• The specific flash sales limit the consumer choice.
  • It prevents a level playing field.
  • It does not ban conventional e-commerce flash sales.
• It also introduced the concept of “fall-back liability”.
  • According to this, e-commerce firms will be held liable in case of loss to the customer.
• It also restricts e-commerce companies from “manipulating search results or search indexes”.
• It also protects the personal information of the consumer.
• Any online retailer will first have to register itself with the Department of Promotion for Industry and Internal Trade (DPIIT).
• Any entity having 10 percent or more common ultimate beneficial ownership will be considered an “associated enterprise” of an e-commerce platform.
• It also mandates e-commerce companies to appoint a grievance officer, a chief compliance officer, and a nodal contact person “for 24×7 coordination with law enforcement agencies”.
• To share information with a “government agency which is lawfully authorized for investigative or protective or cybersecurity activities.