New e-commerce rules provide clarity on responsibilities of marketplaces, sellers: Industry execs

It will be applicable to all electronic retailers (e-tailers) registered in India or abroad but offering goods and services to Indian consumers.

E-commerce (Pixabay)

New rules for e-commerce entities, including mandatory display of 'country of origin' on products, provide clarity on the responsibilities of marketplaces as well as sellers and will enhance protection for buyers, industry executives said on Friday.

The 'Consumer Protection (E-Commerce) Rules, 2020' were notified on Thursday. It will be applicable to all electronic retailers (e-tailers) registered in India or abroad but offering goods and services to Indian consumers. Violation of the rules will attract penal action under the Consumer Protection Act, 2019.

"These (new rules) will enhance protection for online buyers in India. The new rules also clarify the distinct scope of responsibilities between the marketplace platform and the sellers on the marketplaces," a Snapdeal spokesperson said.

The spokesperson also said that this clarity in law making will help in effective enforcement of these laws and in creating an ease of doing business environment for e-commerce marketplaces, while protecting the interests of consumers.

An Amazon spokesperson said the company is examining the consumer protection rules that are applicable to the sector and will comply with them.

Flipkart and Paytm Mall did not respond to e-mailed queries.

Industry body IAMAI said the rules correctly understand that there are two different models of e-tailing -- inventory-based and online marketplace -- that require different levels of direct responsibility to consumers.

"Recognition of online marketplaces as 'intermediaries' thus helps absolve them of certain product liabilities, which now rightly lie with sellers conducting their business on such platforms.

"Sellers are now mandated to take responsibility for 'goods or services that are defective, deficient or spurious' and cannot refuse to take back such goods," the Internet and Mobile Association of India (IAMAI) said.

The new rules also mandate that marketplaces as well as sellers would be required to have grievance officers who have to respond in a time-bound manner.

An industry executive, who did not wish to be named, said the requirement for sellers to appoint a grievance officer will increase the burden on a small seller, thereby requiring investment in terms of costs and time (spent on interacting with customers).

IAMAI said the new rules, in particular, do justice to the concerns of online marketplaces about the earlier liabilities for counterfeit products, which now rightly lie with the sellers conducting business on these platforms.

"Platforms now are mandated to make 'reasonable efforts to maintain a record of relevant information' that allow identifying sellers who are repeat offenders for offering spurious goods.

"Furthermore, platforms are now no longer mandated to take corrective actions and can off-board such sellers on a 'voluntary basis'," it added.

The association also highlighted the need for an extension of application of the rules from its present mandate of date of notification since logistics services are still settling in under COVID-19 challenges and changing/ re-coding platforms to implement some of the new provisions will take time.

According to the new rules, the e-commerce players will have to display the total price of goods and services offered for sale along with break-up of other charges. They are also required to mention the 'expiry date' of goods offered for sale and the 'country of origin' of goods and services that are necessary for enabling the consumer to make an informed decision at the pre-purchase stage.

E-commerce players have to display details about return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, and grievance redressal mechanism, and any other similar information that may be required by consumers to make informed decisions.

Sellers offering goods and services through a marketplace e-commerce entity will have to provide the above details to the e-commerce entity to be displayed on its platform or website.

The new rules do not permit any inventory e-commerce entity, including single-brand retailers and multi-channel single-brand retailers, to "falsely represent itself as a consumer and post reviews about goods and services or misrepresent the quality or the features of any goods and services".

The inventory e-commerce entities will also have to ensure that the advertisements for marketing of goods and services are consistent with the actual characteristics, access and usage conditions of such goods or services.

Under the new rules, no inventory e-commerce entity will be allowed to refuse to take back goods or withdraw or discontinue services purchased or agreed to be purchased, among others, subject to various conditions.

On July 20, Consumer Affairs Secretary Leena Nandan had said rules have been finalised after taking inputs from the Department for Promotion of Industry and Internal Trade (DPIIT), under the aegis of the commerce ministry, so that they do not contravene with the overall e-commerce policy.