Economics

Transparency on details of sellers among key features of draft guidelines

In News

  • The Department of Consumer Affairs, under the Ministry of Consumer Affairs, Food and Public Distribution has released the draft E-Commerce Guidelines for Consumer Protection 2019 for consultation.
  • It is the second draft on regulating e-commerce.
  • The Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry had earlier released a draft for National E-Commerce Policy in February 2019.
  • That draft hasn’t been ratified into a law yet.

Aim

  • The guidelines will act as guiding principles for e-commerce businesses to
    • Prevent fraud and unfair trade practice
    • Protect the legitimate rights and interests of consumers

Application

  • The guidelines will apply to the Business-to-Consumer(B2C) e-Commerce, including goods and services, which also include digital contents products.
  • E-commerce businesses like inventory-based platforms, marketplaces for new and used goods, service-based platforms like ride-hailing applications, food delivery platforms, travel and hotel booking services, event ticketing platforms and online pharmacies are likely to be covered under it.
  • Inventory based model of e-Commerce: An e-Commerce activity where inventory of goods and services is owned by e-Commerce entity and is sold to the consumers directly.
  • Market place model of e-Commerce: It provides an information technology platform by an e-Commerce entity on a digital & electronic network to act as a facilitator between buyer and seller.

Liabilities of E-Commerce Entities

Transparency

  • Enable consumers to make informed decisions by displaying terms of contract between e-commerce entity and the seller related to return, refund, exchange, warranty/guarantee, delivery/shipment, mode of payments, grievance redressal mechanism etc.
  • Ensure that advertisements for marketing of goods and services are true and accurate.

Facilitate Information

  • Mention safety and healthcare information of the goods and services advertised for sale.
  • Provide information on available payment methods: their security, how to use them, how to cancel regular payments under those methods, charge back options, and any applicable payment costs.

Data Security

  • Ensure that personally identifiable information of customers is protected, and that such data collection, storage and use comply with provisions of the Information Technology (Amendment) Act, 2008

User Friendly

  • Accept return of goods if: delivered late, or defective, wrong or spurious product is delivered, and/or the features are not as advertised
  • Process payments towards accepted refund requests of the customers within maximum 14 days

Responsibility

  • On becoming aware of any counterfeit product being sold on its platform, it shall notify the seller, and if the seller is unable to provide any evidence that the product is genuine, it shall take down the listing and notify the consumers of the same.
  • It shall be held guilty of contributory or secondary liability if it makes an assurance vouching for the authenticity of the goods sold on its marketplace, or if it guarantees that goods are authentic.

An e-commerce entity shall not

  • Directly or indirectly influence the price of the goods or services and shall maintain a level playing field.
  • Adopt any unfair methods or unfair or deceptive trade practices that may influence transactional decisions of consumers in relation to products and services.
  • Leave fake reviews as consumers, or misrepresent/exaggerate the quality or the features of goods and services.

Liabilities of the Sellers

  • Contract: Sellers shallhave prior written contract with the respective e-commerce entity in order to undertake such sale.
  • Price Transparency: Display total and break up price for the goods or service, that includes all compulsory charges such as delivery, postage, taxes and handling and conveyance charges.

Facilitate information

  • Provide mandatory safety and healthcare warnings and shelf life that a consumer would get at any physical point of sale.
  • Be upfront about how exchange, returns and refund process works, and who bears the costs of return shipping.

User Friendly

  • Provide fair and reasonable, delivery terms.
  • Be responsible for any warranty/guarantee obligation of goods and services sold

Consumer Grievance Redress Procedure

  • Consumers should be provided a transparent and effective consumer protection that is not less than the level of protection offered in other forms of commerce.
  • The e-commerce entity shall publish on its website the name of the Grievance Officer, his/her contact details.
  • The details of the mechanism by which users can notify their complaints, should also be published on the website.
  • The Grievance Officer should redress the complaints within one month from the date of receipt of complaint.
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