pri New Rules & Regulations for Marketplace e-commerce Entities New Rules & Regulations for Marketplace e-commerce Entities

In this write up we will discuss about rules w.r.t. marketplace e-commerce entity. In my last article we had discussed about how the new rules have affected the e-commerce entities. You can refer the article below for more details:

Before moving further, let us first understand what marketplace e-commerce entity is.

It means an e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers.

Liabilities of marketplace e-commerce entities

Requirement of sellers through an undertaking

Every marketplace e-commerce entity shall require sellers through an undertaking to ensure that descriptions, images, and other content pertaining to goods or services on their platform is accurate and corresponds directly with the appearance, nature, quality, purpose and other general features of such good or service.

Following information to be provided

  • details about the sellers offering goods and services, including the name of their business, whether registered or not etc.
  • a ticket number for each complaint lodged through which the consumer can track the status of the complaint
  • information relating to return, refund, exchange, warranty and guarantee, 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
  • 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, and the contact information of the relevant payment service provider
  • an explanation of the main parameters which, individually or collectively, are most significant in determining the ranking of goods or sellers on its platform and the relative importance of those main parameters through an easily and publicly available description drafted in plain and intelligible language

Covenants w.r.t. relationship with sellers

Every marketplace e-commerce entity shall include in its terms and conditions generally governing its relationship with sellers on its platform, a description of any differentiated treatment which it gives or might give between goods or services or sellers of the same category.

Maintaining record of relevant information

Every marketplace e-commerce entity shall take reasonable efforts to maintain a record of relevant information allowing for the identification of all sellers who have repeatedly offered goods or services that have previously been removed or access to which has previously been disabled under the relevant act.

Duties of sellers on marketplace

Unfair trade practice shall not be followed

A seller offering goods or services through a marketplace e-commerce entity shall not adopt any unfair trade practice whether in the course of the offer on the e-commerce entity’s platform or otherwise.

Seller shall not represent itself as a consumer

A seller shall not 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.

Marketplace e-commerce entity shall not refuse to take back goods, or withdraw services offered to customers

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, if paid, if such goods or services are defective, deficient or spurious, or if the goods or services are not of the characteristics or features as advertised or as agreed to, or if such goods or services are delivered late from the stated delivery schedule.

But in case there is a case of late delivery due to force majeure, then this clause shall not be applicable.

Following information to be provided from seller to e-commerce entity to be displayed on its platform or website:

  • all contractual information required to be disclosed by law
  • total price in 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, as applicable
  • all mandatory notices and information provided by applicable laws, and the expiry date of the good being offered for sale, where applicable;
  • all relevant details about the goods and services offered for sale by the seller including country of origin which are necessary for enabling the consumer to make an informed decision at the pre purchase stage
  • the name and contact numbers, and designation of the grievance officer for consumer grievance redressal or for reporting any other matter
  • name and details of importer, and guarantees related to the authenticity or genuineness of the imported products
  • accurate information related to terms of exchange, returns, and refund including information related to costs of return shipping in a clear and accessible manner
  • relevant details related to delivery and shipment of such goods or services; and
  • any relevant guarantees or warranties applicable to such goods or services.

Other duties:

  • have a prior written contract with the respective e-commerce entity
  • appoint a grievance officer for consumer grievance redressal and ensure that the grievance officer acknowledges the receipt of any consumer complaint within forty-eight hours and redresses the complaint within one month from the date of receipt of the complaint;
  • ensure that the advertisements for marketing of goods or services are consistent with the actual characteristics, access and usage conditions of such goods or services.
  • 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.

Conclusion – These new rules and regulations mandate that marketplaces, as well as sellers, would be required to have grievance officers who have to respond in a time-bound manner. The new rules empower the central government to act against unfair trade practices in e-commerce, direct selling.

Disclaimer: The entire contents of this article is solely for information purpose and have been prepared based on relevant provisions and as per the information existing at the time of the preparation. It doesn’t constitute professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information’s provided herein above.

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July 2021