E-Commerce Guidelines for Consumer Protection 2019

The Department of Consumer Affairs has released the draft E-Commerce Guidelines for Consumer Protection 2019. Food and Public Distribution looks to finalize on the guidelines that will regulate the e-commerce sector in India. The new guidelines are expected to focus on fraud prevention, clamping down on unfair trade practices and to protect the interests of consumers. The e-commerce players in India including the likes of Amazon, Flipkart and Paytm Mall will have to adhere to the new guidelines, when they come into effect. It is expected that the once the feedback process finishes on September 16, the Department of Consumer Affairs will then take that into consideration to draft the final regulations for e-commerce in India.

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The draft guidelines define an e-commerce entity as “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.” This basically means that shopping websites including Amazon, Flipkart, Paytm Mall, Myntra, Jabong, Ajio, Tata Cliq, H&M, Zara, and others will fall under the same definition. And going by this, it is expected that services such as Zomato, Swiggy, and pretty much any food delivery service will also be regulated by the same set of rules. What is not clear at the moment is whether taxi/cab aggregators such as Uber and Ola fall within the same category of e-commerce players or not.

New guidelines for being eligible to operate an e-commerce business in India are a party of the E-Commerce Guidelines for Consumer Protection 2019. First, the business needs to be registered as a legal entity as per the laws of India. There also needs to be a declaration confirming compliance with the guidelines. “The promoter or key management personnel should not have been convicted of any criminal offence punishable with imprisonment in last 5 years by any Court of competent jurisdiction,” say the draft guidelines. All e-commerce entities in India will have to comply with the provisions of Information Technology (Intermediaries guidelines) Rules, 2011. All the payments are required to be facilitated by the e-commerce entity while following the guidelines of the Reserve Bank of India (RBI).

The new guidelines could bring into effect significant changes to rules that should ensure that unfair trade practices are clamped down on. It is expected that e-commerce players will not influence the price of goods and services, maintain a level playing field with rivals, use unfair or deceptive practices to influence a consumer’s transactional decision or falsely represent facts about a product or service.

It is good news for consumers, since e-commerce players will now have to follow specific guidelines for every transaction that you make. The new guidelines include conditions such as ensuring that the advertisements for marketing of goods or services are consistent with the actual characteristics and also mention safety and health care information of the goods and service advertised for sale.

One of the biggest changes could be that e-commerce players will now be mandated to make refunds as requested by consumers, within 14 days.

In terms of payments, e-commerce players will be required to provide information on available payment methods, the security of those payment methods, how to use those methods and also how to cancel regular payments such as subscriptions under those methods.

Sellers who are advertising or selling their products on an e-commerce platform will also have to follow a new set of guidelines. The new rules include responsibility for any warranty/guarantee obligation of goods and services sold, providing a proper break-down of the total bill including shipping charges, delivery costs, conveyance charges etc. Sellers on e-commerce platforms are also now mandated to display the health warnings and shelf-life statistics for the products they sell, as offline sellers would—this would include the best by dates and expiry dates, particularly for consumables and perishable products.

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