Ecom firms may face higher compliance burden under new consumer rules

Amended rules require greater disclosure on pricing, search results, dark patterns and product information, with companies given until January 2027 to comply

India’s e-commerce companies will face a higher compliance burden under new consumer protection rules, industry executives have pointed out.

 

The Department of Consumer Affairs on Thursday amended the Consumer Protection (E-Commerce) Rules, 2020, to address emerging concerns in online commerce, strengthen consumer safeguards and balance ease of doing business. The amended rules introduce a more transparent regulatory framework and will come into force on January 1, 2027.

 

Industry executives said consumer trust and greater transparency are important as e-commerce becomes a larger part of retail, and the industry should be accountable for the experience it creates for consumers. However, some raised concerns on the business side.

 

“Where I think the government should be careful is in making the framework too prescriptive for marketplace businesses,” said one industry executive.

 

For example, requiring disclosure of the relative weight of ranking parameters could go beyond transparency and get into how a platform operates its commercial algorithms. Similarly, the 30-day lowest-price requirement needs to recognise that on a marketplace the price is set by individual sellers and can change frequently.

 

A key provision of the amended rules requires every e-commerce entity to become a partner in the convergence process of the National Consumer Helpline (NCH), strengthening the integration of e-commerce platforms with the national consumer grievance redressal mechanism. During 2025, the NCH received 1,771,622 grievances, of which 511,196, or around 29 per cent were related to the e-commerce sector.

 

Some executives said large e-commerce companies have already put in place much of the infrastructure needed to comply with the amended rules, but the requirements could prove more challenging for smaller players and startups. In particular, smaller companies may struggle to monitor consumer affairs portals and respond to grievances within the stipulated timelines, while larger platforms can often resolve complaints within 48 hours or less.

 

“Can a smaller player do it? The answer is no,” said an executive. “So smaller players would need to have more people to look at the consumer affairs website, to check if there are any complaints against them. A startup cannot do that.”

 

The amended rules also prohibit the manipulation of search results in a way that misleads users or affects the relevance of results to their search queries.

 

Sponsored listings must be identified through clear and prominent disclosures. Where a price reduction is announced, both the reduced price and the prior price must be displayed, with the prior price defined as the lowest price at which the goods or services were offered during the 30 days preceding the announcement.

 

An executive said the new requirements around price reductions could create technology and data integrity challenges. While displaying the previous price alongside a reduced price would improve transparency and help prevent misleading discount claims during events such as festive sales, marketplaces could face difficulties if sellers provide inaccurate pricing information. The executive said the responsibility should ultimately rest with sellers for the accuracy of such data.

 

E-commerce entities must also comply with the Guidelines for Prevention and Regulation of Dark Patterns, 2023, conduct a yearly self-audit and prominently display a certificate of compliance.

 

On dark patterns, industry executives said they did not see any issue with the principle of platforms doing an annual self-assessment. They said making platforms accountable for the consumer experience is reasonable. “The discussion should be around having a practical compliance framework, rather than an absolute certification standard,” said one executive.

 

Marketplace e-commerce entities must also provide key seller and product information, including best before or use before dates, return and refund policies, warranty, delivery and payment details, to enable informed consumer decisions.

 

On warranty and best-before or expiry information, an executive said sellers should be responsible for entering accurate product data and should be incentivised to remove and safely dispose of expired products. Marketplaces, the executive argued, should not be held responsible for seller-level data errors or products that have expired, particularly when such products are discovered at a warehouse and the e-commerce company is penalised.

 

The amended rules also prohibit marketplace e-commerce entities from using consumer information for specified purposes without express and affirmative consent. They cannot collect bundled fees for services unrelated to the e-commerce platform, subject to the specified exception for loyalty or membership programmes. For imported goods, importer details and the country of origin must be disclosed.

 

Sachin Taparia, founder, LocalCircles, said the amended rules close a two-year-old demand from consumers, who in 2024 had highlighted the need to display best-before dates for human-consumption products on e-commerce and quick-commerce platforms.

 

“It is good to see FSSAI, Legal Metrology and now CCPA commit to enforcement or change the rules to drive this compliance after recent LocalCircles escalation in June this year,” said Taparia. “We are confident that if all these agencies enforce, it will drive compliance and we will hear significantly fewer cases of people receiving near-expiry or expired products through online platforms.

 

“We welcome the government’s focus on strengthening consumer protection and transparency in e-commerce,” said a Flipkart spokesperson. “We remain focused on building consumer trust while enabling lakhs of sellers, including small businesses, to participate in India’s digital commerce economy.”