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Draft rules for e-commerce companies proposed

  • Posted By
    10Pointer
  • Categories
    Economy
  • Published
    24th Jun, 2021

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.

e-Commerce Industry in India

  • India e-commerce will reach US$ 99 billion by 2024.
  • It is growing at a 27% CAGR over 2019-24.
  • Since 2014, the Government of India has announced various initiatives, namely
    • Government eMarketplace (GeM)
    • Open Network for Digital Commerce (ONDC)
    • The Consumer Protection (e-commerce) Rules 2020
    • National Retail Policy
    • Under the Digital India movement, the Government launched various initiatives like Umang, Start-up India Portal, Bharat Interface for Money (BHIM),etc
    • FDI in E-commerce marketplace model to up to 100% (in B2B models)

Verifying, please be patient.

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