CONSUMER PROTECTION (E-COMMERCE) RULES, 2020

Introduction

To protect consumers from malpractice and to get their concerns addressed, the Ministry of Consumer Affairs, Food, and Public Distribution notified the Consumer Protection (E-Commerce) Rules, 2020. The rules have been formulated with the prima facie objective of regulating the E-commerce sector of India and for the protection of consumers from unfair trade practices carried out on such platforms.  

After almost a year of enactment of The Consumer Protection Act 2019, the legislation that repealed a more than thirty years old Consumer Protection Act 1986, the government notifies the Consumer Protection (E-Commerce) Rules 2020. These rules shall be in effect from 23 July 2020.

Background

The consumer protection act has boosted the regulator’s approach towards the protection of consumers, and it has reinforced the legal mechanism for efficient and time-bound settlement of consumer disputes. In an era where technology has taken the lead in facilitating the retail trade and has made the marketplace accessible by a few clicks of buttons, the market is no longer bound by location, time, space constraints, distance, or logistical challenges. 

The need for regulating the E-commerce platform was greatly felt, with the need to keep pace with evolving market and legislation, such as Indian Exchange Control laws (IEC Regulations) and the Information Technology Act 2000, to ensure fairness in technology and data-driven commercial environment.

Changes brought by the Rules.

The key highlights of The Consumer Protection (E-Commerce) Rules, 2020 are:

1. Duties of Sellers on Marketplace

The Consumer Protection (E-Commerce) Rules, 2020 imposes certain duties on the sellers on an E-commerce platform, such as:

• No seller shall pose as a consumer and post reviews about the goods or/and services sold by him or about the features of the goods/services sold by him.

• No seller shall refuse to take back, withdraw or discontinue any goods or/and services purchased from him if the goods or/and services provided by him are defective or do not match the qualities/features promised by him on the website or if the goods/services are delivered later than the expected delivery date.

2. Duties and Liabilities of Inventory E-commerce Entities

It is the duty of Inventory E-commerce Entities to provide the following:

• Accurate information on returns, replacement, warranty and guarantee, shipment position, delivery, any cost of return shipping if applicable, made available for payment, any grievance redressal mechanism if any, and all mandatory notices and information required by applicable laws.

• If any inventory E-commerce has vouched for the authenticity of goods or/and services being sold, it shall bear the proportionate liability in any action regarding the authenticity of such goods and/or services.   

3. Liabilities of Marketplace E-commerce Entities

Apart from general rules and liabilities, The Consumer Protection (E-Commerce) Rules, 2020, impose certain liabilities on E-commerce entities. They include:

• Taking due diligence on the inter intermediaries under the IT Act and the IG Rules

• Ensuring accuracy of the description of goods or/and services and corresponding to that through an undertaking by the seller.

• Providing a description of any differential treatment that is given to goods, services.

• Maintaining a record of those sellers who frequently offer goods or/and services that the platform had removed under Intellectual Property Laws or the Information Technology Act. 

4. Duties of E-commerce entities

The E-commerce Entity is required by The Consumer Protection (E-Commerce) Rules, 2020 to: 

• Display the basic information about them on their websites, such as name, contact details, and address. Such information shall be prominently displayed.

• Form a grievance redressal mechanism for consumers, which shall include a customer care number and a grievance redressal officer whose details should be published on the platfoMentiontion the name and details of the importer in case goods or/and services are imported.

• Effect the refunds as per the RBI prescriptions within a reasonable period.

Our word

The Consumer Protection (E-Commerce) Rules, 2020, set out a uniformity for all E-commerce entities and are crucial to better digital governance. Its implementation can be said to result in an increased operational cost for all of its stakeholders, which shall include small sellers. The operational details will need significant man-hours over and above the cost of maintaining and uploading the data. 

Overall, it can be said that if the implementation of the rules is taken in its true spirit, it will greatly protect consumers from unfair trade practices to a great extent.  

Author: Shrishti Zaveri