Consumer Protection (E-Commerce) Rules, 2020: Highlighting Facts

India is evident to the fact that its first E-commerce interaction took place vide IRCTC. This was the government’s first experimental move to give privilege to the host of public for hassle free bookings. Followed the path laid down by the Indian Railways, the Airlines industry jumped into the online segment to cut down the commissions of the agents and provide a user-friendly platform for air ticket bookings to the public. This step towards commercial use of the internet became a huge success and till date has always been on the rise. From Air ticket to bus ticket, household to luxury, education to consultancy, everything that a person could think of is available at just a click.

The major revenue generating players is the e-commerce industry, and thanks to Flipkart and Amazon, that defined a whole new concept of business and took it to new heights. At this very time, the E-Commerce industry has been on a booming stage and is providing a hassle free purchase and sale platform. Due to the existence of these platforms and online marketplaces the consumer demands and consumption patterns have changed and more likely to increase in near future.

But, with the advent and increase in competition among such online marketplaces, survival has become tough and hence anticipation exists that companies may take course to unfair trade practises to counter such demands and survive.

Under the Consumer Protection Act regime, it was necessary to keep a check on such online marketplaces and their sales strategy and for the deployment of the same, new Consumer Protection (E-Commerce) Rules, 2020 has been introduced by the Government that would ensure smooth implementation of Consumer Protection Act notified and enforced on 20th July, 2020.

Applicability:

The same shall apply to:

(a) All goods and services bought or sold over the digital platform;

(b) All models of e-commerce, including marketplace and inventory models of e-commerce;

(c) All e-commerce retail, including multi-channel single brand retailers and single brand retailers in single or multiple formats.

A point worth emphasizing is that these rules would also be applicable to an E-Commerce entity which is not established in India but it offers goods and services to consumers in India.

Appointing an official:

Every e-commerce entity is required to appoint a nodal person of or a senior designated official who is resident in India to look into the compliances of the CPA and E-Commerce Rules as applicable.

Information Disclosures:

Rule 4(2) provides for disclosure of material information on the e-commerce marketplace in clear and accessible manner that involves:

  • Legal name the entity;
  • Geographic address of its headquarters and all branches;
  • Name and details of its website; and
  • Contact details, including mobile numbers of customer care, e-mail address and grievance officer to help user make an informed decision.

Grievance Redressal Mechanism:

Rule 4(4) mandates establishing a Grievance redressal mechanism and appointing a Grievance Officer who would look into and entertain the grievances reported by the consumers and provide an effective remedy for its redressal. Such e-commerce platforms need to update the information of such Grievance Officer like his name, contact details and designation. Such Grievance Officer needs to acknowledge the complaints reported by the consumers within forty-eight hours of filing and get the same redressed within a span of one month from date of receipt of such complaint.  However, such Rules have mandated appointment of Grievance Officer by the sellers too, who wish to sell their products or offer their services through e-commerce entities, which could be a setback for many as many of such sellers are people who are working on a very small-scale and could hardly afford to cut a pay-check for such grievance officer.

Price Manipulation:

Rule 4(11) specifically negates the use of any unfair practise of unjust price determination of products or services offered on e-commerce platforms for gaining any unreasonable profit from the consumers by taking advantage of circumstances or market conditions. Not to deny, during the pandemic crisis various essentials likes masks and sanitizer were overpriced due to the hefty demand and that provided a leverage to retailers to extract unfair profit margins. Apart from this, no cancellation charges be imposed on the consumers unless the same amount is borne by the e-commerce entity itself, if the purchase is cancelled for any reason.

Factual Presentation:

Every seller registered on marketplace e-commerce entity shall be required to make sure that descriptions, images, and other content of goods or services on e-commerce platform is accurate and corresponds directly with the appearance, nature, quality and purpose of such goods and services. With this coming into force, no foul play would be entertained and consumers could take informed decisions vide trusted information about each specifications of products or services on offer.

Other T&C’s:

The marketplace e-commerce entity needs to clearly provide information pertaining to return, refund, exchange, warranty and guarantee, preferential treatment to its sellers, if any,  delivery and shipment, modes of payment, and grievance redressal mechanism, and any other similar information which may be required by consumers to make informed decisions while purchasing. Apart from this, the payment methods, payment security provider, safety and security undertaken to provide online payment facility and any hidden charges, if any, included in such transactions needs to be disclosed legibly.

Seller’s Due-diligence:

  • No false representation of the seller be entertained, wherein they misrepresent themselves as consumers and post reviews for the products, or falsely claim regarding the quality of goods and services.
  • The seller cannot refuse the refund of the amount received by him/her, on account of any goods or services sold vide marketplace e-commerce platform in case such goods are defective, deficient or not up to the mark as represented by such seller on the marketplace platform, or even if such goods are delivered after the scheduled delivery date, exception being such late delivery isn’t on the grounds on force majeure.
  • The seller needs to enter into a contract with such marketplace e-commerce entity and provide disclosures regarding its legal name, principal geographic address of its headquarters and all branches, the name and details of its website, its e-mail address, customer care contact details such as fax, landline, and mobile numbers and where applicable, its GSTIN and PAN.
  • Other disclosures about total price in single figure of any good or service along with the breakup price, delivery charges, postage and handling charges, relevant details about the goods and services offered for sale by the seller including country of origin, name and details of importer, and guarantees related to the authenticity or genuineness of the imported products, guarantees or warranties applicable to such goods or services etc. needs to be given.

Non-compliance:

The provisions of the Consumer Protection Act, 2019 would be applicable on case of any non- compliance in respect of the aforesaid Rules.

Conclusion:

With the advent of internet and technology, online marketplaces have gained much attention and created a sense of confidence among the consumers who are always on the go and ready to avail all the goods and services at just a click. They get the access to a lot of choices, plenty of options to choose from and big fat discounts while shopping without stepping a foot outside their homes. It is also true that with this e-commerce platform gaining popularity over the years, competition has soared up and multiple players have jumped to get their piece of pie. To retain the consumer’s confidence among such platforms and to encourage such start-ups, strict and stringent laws are needed that on one hand would embrace the good work undertaken towards the economic growth and employment and on the other hand to also mitigate any unfair business tactics to earn a fortune. It’s the need of the hour to embrace such steps that could keep up the dignity of businesses and prove the notion of “Consumer is the King.”

Author Bio

Qualification: CS
Company: Rola & Co. (Company Secretaries)
Location: Prayagraj (Allahabad), Uttar Pradesh, IN
Member Since: 28 Jul 2020 | Total Posts: 3

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