Govt drafts new rules for e-commerce sites: No fake reviews, misleading ads

E-commerce sites will also have to accept returns if a product is delivered later than scheduled.

Atom E-commerce

In a bid to regulate e-commerce business in the country, the Consumer Affairs Ministry has released a set of guidelines under the Consumer Protection (e-Commerce) Rules, 2019. The rules came into effect on November 11 and every e-commerce entity in India has 90 days to comply with the guidelines.

The rules state that an e-commerce entity shall not directly or indirectly influence the price of a good or services and shall maintain a level playing field. It also prohibits e-commerce players from using unfair or deceptive practices in promoting sale, use or supply of any goods or services that may influence the transactional decisions of consumers.

The draft guidelines state that the promoter or key management personnel of an e-commerce company should not have been convicted of any criminal offence punishable with imprisonment in last 5 years.

Every e-commerce entity will now have to display terms of contract between them and the seller with regard to return, refund, exchange, warranty, delivery, mode of payments, grievance redressal mechanism, etc. so that consumers can make informed decisions.

While advertising or marketing a product, the rules state that the ads should be consistent with the actual characteristics, access and usage conditions of products or services sold. It also mandates them to mention safety and healthcare information. It also prohibits companies from publishing fake reviews.

While a consumer is buying a product, the new draft rules state that the e-commerce player should provide all information on payment methods, security, cancelling payments, and all costs applicable.

E-commerce players will also have to accept returns if a product is delivered later than the delivery schedule and if the product is defective, wrong, and doesn’t not match the characteristics advertised. If a counterfeit product is found to be available on its platform, the e-commerce player will have to cross check with the seller and if there isn't enough evidence on the product being genuine, it will have to take down the product listing and notify consumers.

E-commerce entities will also be held guilty of contributory or secondary liability if it makes an assurance vouching for the authenticity of the goods sold on its marketplace.

All refunds shall be made within 14 days.

The draft guidelines also call for protection of consumer data. “Ensure that personally identifiable information of customers is protected, and that such data collection and storage and use comply with provisions of the Information Technology (Amendment) Act, 2008.”

Sellers:

In terms of sellers, the rules require an e-commerce company to display all details about the seller. This includes their business, legal name, address, name of website, contact information, products they sell and how they can be contacted.

The draft rules also list liabilities of sellers. Some of these include:

Every seller selling or advertising products on an e-commerce platform should have a written contract with that entity and provide all required information.

Sellers will also have to display single-figure total and breakup of the price for the goods or services they are selling. This includes all compulsory charges such as delivery, postage, taxes and handling and conveyance charges. They are also mandated to provide fair and reasonable delivery terms, or to directly reference the shipping policy. Sellers will be responsible for any warranty obligation of goods and services sold.

They also have to be upfront about how exchange, returns and refund process works, and who bears the costs of return shipping.

Consumer grievance redress procedure:

Every e-commerce company will have to publish on its website the name and contact details of its Grievance Officer and how users can register complaints.

The draft rules state that the Grievance Officer shall redress the complaints within one month from the date of receipt and also allow consumers to register their complaints over phone, email or website and provide complaint number for tracking the complaint.

Within 90 days, all e-commerce companies must submit a self-declaration to the Department of Consumer Affairs stating that it is in compliance with these guidelines. Further, it has also invited comments from industry stakeholders till December 2.

The Confederation of All India Traders (CAIT), which has been fighting with e-commerce companies over deep discounting and predatory pricing, welcomed The Consumer Protection (e-commerce) Rules 2019. It said that the rules are a positive step to ‘curb malpractices conducted by e-commerce players not only to destroy domestic trade but also to mislead the consumers’.

It will, however, continue with its two-month nationwide agitation.