Sub-standard products? New rules to fix onus on e-commerce platforms

In due course, if you get a sub-standard product through any e-commerce platform, both the manufacturer and the platform could be held guilty.

Under new e-commerce rules being framed by the government, ‘electronic service providers’ would be clearly defined, so that such platforms don’t escape responsibility. Also, that e-commerce platforms mandatorily disclose the terms and conditions they have entered into with the sellers.

Officials said the new rules, being prepared by the consumer affairs department, will be incorporated in the revised consumer protection law which is awaiting Parliament approval, as an enabling provision.

“The new rules would be a complete and comprehensive set of guidelines, one which would give needed clarity to the sector,” a senior official said.

One item of focus, he added, would be data privacy and security of consumers. All e-commerce platforms will have to guarantee the former, both of consumers and sellers. A violation could attract penal provisions. Also, the platforms will have to guarantee full payment security to consumers. All platforms must have a clear policy, prominently displayed, on delivery, return, exchange and refund.

The rules are in the process of circulation between ministries. These come within the broad framework of a national e-commerce policy of the ministry of commerce. The department of consumer affairs, part of a separate ministry, is framing these since the governing of ‘internal trade’ is within its ambit.

The national policy is expected to be finalised by the year-end. It is likely to address issues such as physical and digital infrastructure, regulatory regime, taxation policy, data flows, server localisation, intellectual property rights protection, foreign direct investment and technology flows.

The country's e-commerce sector is expected to touch $120 billion (Rs 8.2 trillion) by the year 2020. Earlier this month, consumer affairs minister Ram Vilas Paswan had said the sector was growing yearly at 51 per cent but the laws regulating digital marketplaces were still evolving.

There ghas been a sharp rise in complaints regarding wrong delivery of products and unfair trade practices. According to a recent statement to Parliament, the number of consumer complaints against e-commerce companies, at 78,088, had risen in 2017-18 by 42 per cent from the earlier year.

Basis on complaints to the National Consumer Helpline in the past five years, the number of complaints against e-commerce companies rose 1,400 per cent.

SALIENT FEATURES

• Defines ‘electronic service provider’ so that platforms don't escape responsibility
• E-commerce platforms need to guarantee data privacy and security for all
• Must have a transparent and open exchange, delivery, return and refund policy
• Display all terms and conditions of agreements reached between sellers for benefits of consumers
• Customers will have to guaranteed full payment security