You ordered some items on the internet with the best price, specifications, and delivery schedule but were disappointed to get the worst results. To pierce the pain further, you are trying to get a refund but failed to get any response. You rank among millions of E-commerce buyers who got cheated, misled, or supplied imitative items, all at the expense of sellers improperly identified by E-commerce web sites. The shoe pinches every one from the USA to India or everywhere with unbearable loss of money too. Let me relate it to the U.S.A. which recently set up a committee on “Combating Trafficking in Counterfeit and Pirated Goods”, and submitted a report to the President of their country on 24th January 2020. Heralded as one of pioneering in nature, its recommendations also incorporating the happening in Europe. The report is highly favored to help India which though formulated some rules in 2019, is in the final stages of coming out rules for E-commerce in 2020 to be input in the web site of government for public comment and further implementation.
Let me look at the scholarly report from the U.S.A.
“Combating Trafficking in Counterfeit and Pirated Goods”
The publicly available report is reproduced from the web:
https://www.dhs.gov/sites/default/files/publications/20_0124_plcy_counterfeit-pirated-goods-report_01.pdf
Let me comprise the report for easy understanding and public recognition.
- In the United States, e-commerce year-over-year retail sales grew by 13.3 percent in the second quarter of 2019 while total retail sales increased by only 3.2 percent as brick-and-mortar retail continued its relative decline.
- Amazon reports third-party sales on its marketplace grew from $100 million in 1999 to $160 billion in 2018. In 2018 alone, Walmart experienced an e-commerce sales increase of 40 percent. In case of Walmart, no pirated goods or duplicate goods could be sold.
- Mind boggling figure of $506 Billion US dollars were reported as pirated counterfeit goods by OECD in 2016.
- The extraordinary steps taken by a genuine manufacturer from R&D level to getting patent for originality, manufacturing hassle subscribing to rules and regulations of any country from where the goods are manufactured and establishing a real marketing arrangement to take care of all involved, etc., are well known to all. Pirated ones totally copying the products sell through all possible illegal means in another country by exploiting all loophole in-laws.
- The report candidly explains how the pirated goods manufacturers were exploiting the existing laws. “Section 321 of the Tariff Act of 1930 has likewise encouraged counterfeiters to favor smaller parcel delivery. Under Section 321, a foreign good valued at or less than $800 and imported by one person on one day is not subject to the same formal customs entry procedures and rigorous data requirements as higher-value packages entering the United States. This reduced level of scrutiny is an open invitation to exploit Section 321 rules to transport and distribute counterfeits.” (It has been stated that very recently this legal lacuna was rectified)
- While the report is of 54 pages with various recommendations to all types of stakeholders, I intend reproducing the same for elaborate understanding.
- Immediate actions to be initiated by the Department of Homeland Security and the recommendations for other departments of the government of U.S.A. as recommended on page 5 are as under:
- “Immediate Actions by DHS and Recommendations for the U.S. Government:
1. Ensure Entities with Financial Interests in Imports Bear Responsibility
2. Increase Scrutiny of Section 321 Environment
3. Suspend and Debar Repeat Offenders; Act Against Non-Compliant International Posts
4. Apply Civil Fines, Penalties and Injunctive Actions for Violative Imported Products
5. Leverage Advanced Electronic Data for Mail Mode
6. Anti-Counterfeiting Consortium to Identify Online Nefarious Actors (ACTION) Plan
7. Analyze Enforcement Resources
8. Create a Modernized E-Commerce Enforcement Framework
9. Assess Contributory Trademark Infringement Liability for Platforms
10. Re-Examine the Legal Framework Surrounding Non-Resident Importers
11. Establish a National Consumer Awareness Campaign”.
My intention is very clear that any action to be taken by the U.S.A. which is one of the closest allies of India and also the major economic partner over the last 7 decades has set the path several times which are just followed by others, suiting the actions accordingly to their requirements. Recently, India has never failed to act after getting advice from all civilized nations.
The advice given by the report for E-commerce platforms is appended below: (The highest level of perfection was used by this powerful committee and hence I do not dare to change any of its recommendations)
“Best Practices for E-Commerce Platforms and Third-Party Marketplaces
1. Comprehensive “Terms of Service” Agreements
2. Significantly Enhanced Vetting of Third-Party Sellers
3. Limitations on High-Risk Products
4. Rapid Notice and Takedown Procedures
5. Enhanced Post-Discovery Actions
6. Indemnity Requirements for Foreign Sellers
7. Clear Transactions Through Banks that Comply with U.S. Enforcement Requests for Information (RFI)
8. Pre-Sale Identification of Third-Party Sellers
9. Establish Marketplace Seller ID
10. Clearly Identifiable Country of Origin Disclosures.”
It is of interest to mention that India is filled with news containing the Indian government taking all steps to enforce “country of origin “label on all imported items which seem to be somewhat inherited from item no. 10 recommendation.
The report on page 41 has given its conclusions which indicates the actions to be followed both at government and e platform industrial levels.
“Additionally, this report has proposed a set of best practices for private sector stakeholders that DHS believes should be adopted swiftly. As the longstanding experiences of brick-and-mortar stores demonstrate, the private sector is capable of operating businesses that sell legitimate, not illicit, goods to American consumers. We should expect the same level of care from online third-party marketplaces that we expect from the stores physically located in our communities.”
My views on this subject do totally coincide with the expert recommendations since my experience in the past narrated the unified action taken by all civilized nations building upon the labor taken by one as the base for the other.
News items glare one’s eyes with the enactment of new E-Commerce rules to be introduced in India very shortly on the basis of the statement of the Central Government during the month of December in 2019.
However, let me recollect some information from E-commerce rules circulated by the central government in 2019 with some details as under.
https://consumeraffairs.nic.in/draft-rule
“The Consumer Protection Act, 2019 was published in the official gazette on 09th August, 2019 for general information. Rules on various topics are required to be notified under the new Act.”
Let me narrate 8 consumer protection rules with their names from the above web.
- Consumer Protection (Central Consumer Protection Council) Rules, 2019
- Central Consumer Protection Authority (Selection and Term of Office of Chief Commissioner and other Commissioners) Rules, 2019
- Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2019
- Consumer Protection (Mediation) Rules, 2019
- Consumer Protection (e-Commerce) Rules, 2019
- Consumer Protection (Direct Selling) Rules, 2019
- Consumer Protection (Qualification for the appointment, method of recruitment, the procedure of appointment, the term of office, resignation and removal of the President and members of the State Commission and District Commission) Rules, 2019
- Consumer Protection (Salary, allowances, and conditions of service of President and Members of the State Commission and District Commission) Model Rules, 2019
I would like to explain Consumer Protection (e-commerce) Rules, 2019 for comparing with U.S.A. rules which have been explained in detail above.
Consumer Protection (e-commerce) Rules, 2019 (India)
4 pages with 1361 words adorn the above rules. Various sections read as under:
- Short title and Commencement
- Definitions
- General conditions for carrying out an e-commerce business
- Liabilities of the E-Commerce entity
- Liabilities of seller
- Consumer grievance redressal procedure
Let the law define the words like e-commerce entity, inventory-based e-commerce, and market place model of e-commerce directly from section 2 of the rules.
a) “E-Commerce entity” means a company incorporated under the Companies Act, 1956 or the Companies Act, 2013 or a foreign company covered under section 2 (42) of the Companies Act, 2013 or an office, branch or agency in India as provided in Section 2 (v) (iii) of FEMA 1999, owned or controlled by a person resident outside India and includes an electronic service provider or a partnership or proprietary firm, whether inventory or market place model or both and conducting the e-Commerce business”.
b) “Inventory based model of e-Commerce” means an e-commerce activity where an inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly.”
c) “Market place model of e-Commerce” means providing of an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between buyer and seller.”
Let us continue our discussions.
Anyone of us may buy or rather forced to buy all types of items from the air conditioner to vegetables and land in troubles with the quality, price or even non-arrival of goods.
Let me reproduce the exact “Consumer grievance redressal procedure” for the enlightened readers which will be useful in case of any difficulty.
“Consumer grievance redress procedure. – Every E-Commerce entity shall, –
i) Publish on its website the name of the Grievance Officer and his contact details as well as mechanism by which users can notify their complaints about products and services availed through their web site.
ii) The Grievance Officer shall redress the complaints within one month from the date of receipt of the complaint
iii) provide a facility to consumers to register their complaints over phone, email or website and shall provide complaint number for tracking the complaint;
iv) Provide consumers with transparent and effective consumer protection that is not less than the level of protection offered in other forms of commerce;
v) Provide a mechanism/system to converge with NCH in grievance redress process”
Conclusion
With the emergence of internet and availability of disposable income coupled with extensive knowledge of people in India from the rich and poor, educated and uneducated, student to a professional or even a senior like myself, E-Commerce has forced itself upon us. Let me narrate a small incidence from my life.
I was standing in a departmental store in Delhi, a very popular and crowded one. Yes, before me, a mother and a small girl of 6 years with a cellular phone were standing. The mother mentioned the price of the item to be given to the counter clerk at the point of sale when the unexpected happened. Contrary to payment of the item and picking up of the item, the mother got the permission of the kid whether the price was o.k. and the kid looking at the comparative chart through the cellular phone agreed with the price by indicating the comparative price of the product.
I enquired from the mother that miracle which for a senior like myself was a revelation. She explained that unless the kid agreed with the price, the product would not be bought.
Can you believe it? Your options would depend upon your kid/grandkid who would exercise their options whether to buy or not depending upon the approval of price on a comparative price level.
Yes, the above article got its inspiration from the girl child only.
Our nation’s brilliant future reckons on you.
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