Final draft of e-commerce policy skips consumer data protection regulations

The earlier draft of the policy which was released in 2019 talked extensively about the ways in which e-commerce companies could collect user data

The National e-Commerce Policy is unlikely to address issues surrounding the protection of personal data and will not prescribe any rules for the sector's use of data, according to individuals familiar with the final draft of the policy, as cited in a Financial Express (FE) report. Additionally, the policy will not establish a separate e-commerce regulator.

The initial draft of the policy, released in 2019, discussed in detail how e-commerce companies could collect user data. It emphasised that an individual consumer who generates data retains ownership rights over that data. The 2019 draft also stated that corporate data processing would be strictly regulated, the Financial Express report indicated.

Sections relating to data protection have been removed from the policy, as the Digital Personal Data Protection (DPDP) Act, passed by Parliament in the monsoon session, already provides users rights over their data while defining the limits on how it can be used. The Act permits the storage of personal data in any location except those on the restricted list.

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This means conditions regarding the use of data generated by Indians while using e-commerce platforms will also apply to companies that process data outside India, the report added.

The DPDP Act

The DPDP Act empowers the government to restrict the transfer of personal data by e-commerce companies to any other country, which may be notified in the future. An official familiar with the matter was cited in the Financial Express report as stating, "The e-commerce companies will have to comply with the DPDP. We are not covering the data protection part in our policy." Following these updates, the draft policy will be submitted to the Prime Minister's Office for approval, after which it will be officially announced.

Demand by Traditional Retail Shopkeepers

Traditional retail shop owners are calling for the e-commerce sector to be overseen by a new, sector-specific regulator. These retailers are seeking a level playing field for small and medium-sized retail businesses. Consumer protection is another aspect that will be addressed in the policy, with updated rules to be issued under the Consumer Protection Act of 2019.