Monday, January 17, 2022

Department of Consumer Affairs invites comments on proposed amendments to Consumer Protection (E-Commerce) Rules, 2020

The Ministry of Consumer Affairs, Food, and Public Distribution has invited comments from stakeholders by July 6, 2021, on the proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020.

The Consumer Protection Act, 2019 was brought into force to protect the rights of consumers and simplified the consumer dispute adjudication process. Meanwhile, the Consumer Protection (E-Commerce) Rules 2020 that came into effect on July 23, 2020, was introduced to protect consumers from unfair trade practices and to address their concerns.

Consumer Protection (E-Commerce)(Amendment) Rules, 2021

The amendments to the existing Consumer Protection (E-Commerce) Rules have been proposed after the Ministry received several complaints of cheating and unfair trade practices in the e-commerce ecosystem. To address the distress of the concerned stakeholders, the Ministry proposed certain changes to the existing Rules.

The proposed amendments aim to protect the interest of consumers and encourage free and fair competition in the market.

What are the proposed changes?

The proposed changes to the existing Rules include the appointment of a Chief Compliance Officer and a ‘Resident Grievance Officer’. Further, it has included the term cross-selling and proposed rules regarding flash sales. According to the proposed amendments, no e-commerce entity shall allow any display or promotion of misleading advertisement whether in the course of business on its platform or otherwise.

Rules regarding flash sale

The proposed amendments do not ban conventional e-commerce flash sales. However, back-to-back or flash sales have been banned that limits consumer choices.

Defining terms

Under the proposed amendment, the word ‘Cross-selling” has been added. Fall Back liability, flash sale has been defined to avoid misrepresentation of the words. These were not defined in the Consumer Protection (E-Commerce) Rules, 2020.

No misleading advertisement

According to the proposed amendments, e-commerce entities should not allow or display or promote any misleading advertisement whether in the course of business, on its platform, or otherwise. An e-commerce entity refers to any person who owns, operates, or manages a digital or electronic facility
or platform for electronic commerce. However, it does not include a seller offering his goods or services for sale on a marketplace e-commerce entity.

Further, the amendments also require e-commerce entities to get themselves registered.

Appointment of Nodal Officer

The amendment has also proposed the appointment of a nodal officer or an alternate senior designated
functionary who is resident in India, to ensure compliance with the provisions of the Act or the rules made thereunder.

Further, the appointment of Chief Compliance Officer and Resident Grievance Officer has been proposed for redressing of the grievances of the consumers on the e-commerce platform. This would ensure effective compliance with the provisions of the Act and Rules and also strengthen the grievance redressal mechanism on e-commerce entities.

Benefits to consumer

The proposed amendments aim to address the problems of the stakeholders, including aggrieved consumers, traders, or associations. It aims to bring transparency to e-commerce platforms and further, strengthens the regulatory regimen.

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