The government is seeking feedback on draft guidelines that seek to protect consumers who shop online. The Ministry of Consumer Affairs introduced the draft ecommerceguidelines for consumer protectionin a notification on Friday.
The proposed rules are aimed at curbing the sale of counterfeit goods, streamlining returns and refunds, and delineating the liabilities of sellers and online marketplaces.
The draft guidelines are “principles for ecommerce business for preventing fraud, unfair trade practices and protecting the legitimate rights and interests of consumers,” the ministry said on its website.
The ministry has sought comments from stakeholders and the deadline for submitting is September 16.
“We are evaluating the draft guidelines…and we look forward to participating in the deliberations to help finalise an operating framework,” a spokesperson for ecommerce marketplace Snapdeal said.
Under the proposed rules, only entities registered in India will be able to carry out ecommerce businesses, a likely roadblock for cross border ecommerce websites, especially Chineseowned ones. It also makes it mandatory for ecommerce marketplaces to display the legal name, address, website, email address and other contact details of sellers, something ecommerce marketplaces have not complied with so far. It also reiterates that ecommerce entities will not be allowed to influence prices of products sold on their websites directly or indirectly, something that has already been a part of FDI rules for ecommerce.
Experts and industry watchers said that the biggest positive in the draft guidelines was the distinction between sellers and marketplace entities in terms of their liabilities. This is expected to bring in clarity in cases where consumers and brands have taken marketplaces to court over discrepancies, instead of targeting sellers.
The guidelines also put the onus on marketplaces to do their own due diligence when customers complain about receiving counterfeit products, and they may need to take down such listings. It even says marketplaces can be held guilty for contributory or secondary liability in case products they certify as authentic turn out to be counterfeit.
“Currently, most ecommerce platforms don’t disclose seller details or their general terms with them, and hence the consumer has very little to hold them accountable in case a fake product is received or a return is rejected,” said Sachin Taparia, founder of online community LocalCircles which provided inputs to the ministry in framing the draft guidelines.
For sellers, the guidelines say they need to display all product details along with health and safety warnings, and provide reasonable delivery terms and be upfront about their policies for returns, exchange and refunds.
Two top executives at leading ecommerce marketplaces said the draft guidelines seemed counter-intuitive since multiple ministries are trying to introduce similar regulations.
“If the DPIIT was made the nodal body to regulate ecommerce in the country, then why is the consumer affairs ministry bringing out its own guidelines?” one of the executives said. “Now, there are three ministries — consumer affairs, information technology and commerce — which are looking to regulate us. This seems very bizarre.”
The draft guidelines are largely in line with mechanisms for consumer protection mentioned in the draft ecommerce policy , which was introduced by the Department for Promotion of Industry and Internal Trade (DPIIT) in February.