ENCODING OF CONSUMER PROTECTION (E-COMMERCE) RULES, 2020- Part – 1

Background:

The Indian Parliament, on 6 August 2019, passed the landmark Consumer Protection Bill, 2019 which aims to provide timely and effective administration and settlement of consumer disputes. The Consumer Protection Act, 2019 (New Act) received the assent of the President of India and was published in the official gazette on 9 August 2019. The New Act comes into force with effect from 20 July 2020. The New Act replaces more than 3 (three) decades-old The Consumer Protection Act, 1986 (Old Act).

This New Act will empower consumers and help them in protecting their rights through its various notified rules and provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant / spurious goods.

The Ministry of Consumer Affairs, Food, and Public Distribution, Government of India notified and made effective the provisions of the Consumer Protection (E-Commerce) Rules, 2020 (“E-Commerce Rules”) under the Consumer Protection Act, 2019 (Act) from 23 July 2020. E-Commerce Rules will be applicable to all electronic retailers (e-tailers) registered in India or abroad but offering goods and services to Indian consumers.

In this article, we are explaining this E-Commerce Rules in question and answer format:

Sr. No Question Answers
1. What is the Definition of the Consumer? As per the act; a person is called a consumer who avails the services and buys any good for self-use.

If a person buys any good and avails any service for resale or commercial purpose, is not considered a consumer.

This definition covers all types of transactions i.e. online and offline.

2. What is an e-commerce entity? It is defined broadly under E-Commerce Rules and it mean any person who owns, operates, or manages digital or electronic facility or platform for e-commerce.
3. To whom E-Commerce Rules are applicable? The E-Commerce Rules apply to all e-commerce transactions involving goods or services, including e-commerce entities which are not established in India but systematically offer goods or services to consumers in India, with the only exception being individuals in certain limited circumstances.
4. What is the scope of these E-Commerce Rules? These E-Commerce Rules shall be applicable to :

(a) all goods and services bought or sold over the digital or electronic network including digital products;

(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; and

(d) all forms of unfair trade practices across all models of e-commerce:

but exclude activity carried out in a personal capacity which is not part of any professional or commercial activity undertaken on a regular or systematic basis.

5. What is inventory e-commerce entity? An e-commerce entity which owns the inventory of goods or services and sells such goods or services directly to the consumers shall include single-brand retailers and multi-channel single-brand retailers;
6. What is marketplace e-commerce entity? An e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers.
7. What all information to be displayed by the e-commerce entity on the website or application? As per the rules, every e-commerce entity must provide various details like as follows and such details must also be displayed of all sellers in case of e-commerce entity :

(a) It’s the legal name;

(b) Address;

(c) Contact details of its customer care and grievance officer;

(d) name and details of the importer (in case of imported goods);

(e) information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, and grievance redressal mechanism;

(f) information on available payment methods, the security of those payment methods, any fees or charges payable by users, the procedure to cancel regular payments under those methods, charge-back options, if any;

(g) the contact information of the relevant payment service provider must also be provided in a clear and accessible manner.

(h) any other similar information which may be required by consumers to make informed decisions;

8. What is the grievance redressal mechanism? Every e-commerce entity must establish an adequate grievance redressal mechanism considering the number of grievances ordinarily received by them and appoint a grievance officer.

It may be noted that even a seller offering his goods or services through a marketplace e-commerce entity will have to appoint a grievance officer for consumer grievance redressal.

9. What is the process for addressing the grievance redressal? Below are the steps that every e-commerce entity has to follow for grievance redressal

(a) The grievance officer will have to acknowledge the receipt of any consumer complaint within 48 hours and

(b) redresses the complaint within one month from the date of receipt of the complaint.

10 What are the key duties of sellers on marketplace e-commerce entity? Below are the duties for the sellers who are offering goods and services through the marketplace e-commerce entity :

(a) provide to the e-commerce entity 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 details

(b) Total price in the single figure of any good or service along with the breakup price for the good or service, showing all the compulsory and voluntary charges, such as delivery charges, postage and handling charges, conveyance charges and the applicable tax, is required to be displayed by the seller;

(c) execute a written contract with the marketplace e-commerce entity;

(d) appoint a grievance office;

(e) Not to falsely represent itself as a consumer and post reviews about goods or services or misrepresent the quality or the features of any goods or services.

(f) No seller offering goods or services through a marketplace e-commerce entity shall refuse to take back goods, or withdraw or discontinue services purchased or agreed to be purchased, or refuse to refund consideration

11 What are the key duties of sellers on Inventory E-Commerce Entity? Below are the duties for the sellers who are offering goods and services through the Inventory e-commerce entity and are subject to similar duties and liabilities as of that of sellers and marketplace e-commerce entities:

(a) To appoint a consumer grievance officer to rectify the complaints in a clear, effective, and efficient manner;

(b) they do not refuse to accept returns if such goods or services are among other factors, defective, deficient, or delivered late (other than owing to force majeure);

(c) Any inventory e-commerce entity which explicitly or implicitly vouches for the authenticity of the goods or services sold by it, or guarantees that such goods or services are authentic, shall bear appropriate liability in any action related to the authenticity of such good or service.

12 What are the liabilities of marketplace e-commerce entities? Below are the liabilities of the marketplace e-commerce entities:

(a) Every marketplace e-commerce entities shall comply with the relevant sub-section(s) of Section 79 and Information Technology (Intermediary Guidelines) Rules, 2011 of the Information Technology Act, 2000. ;

(b) Every marketplace e-commerce entity shall make reasonable efforts to maintain a record of relevant information allowing for the identification of all sellers who have been previously removed. It shall further maintain a record of such sellers who have been disabled under the Copyright Act, 1957 (14 of 1957), the Trade Marks Act, 1999 (47 of 1999) or the Information Technology Act, 2000 (21 of 2000);

(c) It is also mandatory for all the sellers offering goods or services through a marketplace e-commerce entity to have prior written contracts in order to undertake or solicit such sale or offer and display on its platforms all contractual information required to be disclosed by law;

(d) Undertaking from sellers to ensure that the descriptions, images and other information pertaining to goods or services on your platform is strictly accurate;

(e) marketplace e-commerce entities are required to provide for a dispute resolution mechanism on their platforms for consumers to approach the sellers;

(f) It makes incumbent upon them to take an undertaking from sellers to ensure that descriptions and other content pertaining to goods or services on their platform is accurate and corresponds directly with the quality and other general features of such good or service.

13. Who can be a compliance officer? a nodal person of contact or an alternate senior designated functionary who is resident in India, to ensure compliance with the provisions of the New Act or the rules made thereunder.
14. What is the penalty for the contravention of the Rule? The provisions of the Consumer Protection Act, 2019 shall apply for any violation of the provisions of these rules.
15. Link of the rule https://taxguru.in/corporate-law/consumer-protection-e-commerce-rules-2020.html

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