Proposed rules under CPA to cause unnecessary compliance burden for e-commerce cos: IAMAI

The proposed model framework on e-commerce consumer protection will cause "unnecessary compliance burden" for online shopping companies and negatively impact the ease of doing business in India, an internet and mobile companies' association said on Tuesday.

To protect consumer interest, the government has decided to frame rules for e-commerce firms under the new Consumer Protection Act (CPA). It had sought views from stakeholders by September 15 which was later extended until October 31.

The proposed guidelines for e-commerce firms include a 14-day deadline to effect a refund request, mandate e-tailers to display details of sellers supplying goods and services on their websites and moot the procedure to resolve consumer complaints among other aspects.

In its submission, the Internet and Mobile Association of India (IAMAI) said it has highlighted that e-commerce entities are already regulated by multiple authorities under the FDI policy, the Legal Metrology Act, the Food Safety and Standards Act, the present Information Technology Act and the proposed draft National E-commerce Policy.

Each of these regulatory frameworks imposes different obligations and liabilities upon e-commerce entities, creating an atmosphere of regulatory uncertainty for the sector, the IAMAI said.

"IAMAI observes that the model framework does not distinguish between the different models of e-commerce and thereby, certain suggested provisions are redundant or superfluous for certain business models. The guidelines also go beyond the remit of consumer protection, with suggested provisions that come within the purview of different Ministries/Authorities," it noted.

The association pointed out that the definition of e-commerce entity "appears to be extending the scope of 'e-commerce' beyond online marketplaces for goods and services as defined in CPA 2019 by including digital content providers", which are otherwise not construed as being engaged in e-commerce.

The industry body suggested that the definition of "e-commerce entity" in the Draft Guidelines be in alignment with all other regulatory provisions for consistency.

"While the association welcomes the initiative to ensure consumer protection in the e-commerce sector, it highlighted that thepresent draft Model framework is being notified under the CPA of 1986, while a draft CPA 2018 that addresses concerns related to e-commerce is already in the anvil. Once the new Act is notified, the former will be repealed, and these guidelines will be rendered null and void," IAMAI said.