Govt likely to dilute draft e-commerce norms as consultation ends

Revised definition of e-commerce entity has been a bone of contention

The government may dilute some clauses of the draft e-commerce rules aimed at consumer protection, with the consumer affairs ministry completing consultation with e-commerce companies, industry associations, and other relevant stakeholders.

The ministry will soon finalise and notify the rules, sources said.

“Several rounds of meetings and negotiations have been held since October. This came after key government departments, as well as top players raised concerns regarding the proposed amendments in the consumer protection rules on e-commerce,” they said.

“The government had to restart the consultation process and has been meeting companies and other ministry officials to understand their concerns,” they said.

E-tailers had raised concerns over a clause that said they will have to ensure none of their associated enterprises are listed as sellers.

Similarly, the ‘fallback liability’ clause, where liability falls on the online marketplace, instead of sellers — if the product or service negatively impacts the consumer — and a revised definition of an e-commerce entity have been some of the contentious issues.

In June, the consumer affairs ministry proposed fresh guidelines for e-commerce companies to tighten the regulatory regime, make these firms more accountable and protect consumer interest.

While the government had sought comments from relevant stakeholders, and since the last date of submitting comments on the proposed rules was in August, it faced severe criticism from the industry and other government departments alike.

Requests had started pouring in from top foreign and domestic e-tailers to make it less stringent. They had not only sought clarity on certain issues, but also urged the government to remove some of the proposed clauses. Amazon, Flipkart, Snapdeal and industrylobby groups had told the government that rules will negatively impact business and operations.

Even other government departments and ministries such as the finance ministry, ministry of corporate affairs and NITI Aayog, among others, had raised concerns that the proposed rules are not investor friendly.

In response to the criticism from various stakeholders, consumer affairs minister Piyush Goyal, had in the past, welcomed the feedback. He had said it will help the government come up with a more robust policy.