Govt proposes stiff compliance measures for e-commerce companies

The Centre is preparing fresh new recommendations for e-commerce companies, like the appointment of a…

The Centre is preparing fresh new recommendations for e-commerce companies, like the appointment of a main compliance officer, offering choice to the sale of regionally generated products, obligatory registration of e-tailers with the Office for Promotion of Sector and Interior Trade (DPIIT), in an try to tighten the regulatory routine and make these companies extra accountable.

A slew of amendments have been proposed less than the Buyer Safety (E-Commerce) Principles, 2020 ‘to protect the passions of shoppers and stimulate totally free and reasonable level of competition in the market’, the buyer affairs ministry said on Monday. It has sought responses from suitable stakeholders by July six.

In accordance to the proposed rules, e-commerce companies will not be allowed to organise a flash sale that permits sale of products at considerably minimized rates or high discount rates. Separately, the buyer affairs ministry clarified that traditional e-commerce flash income are not banned but precise flash income or back again to back again income which restrict customer option, raise rates and prevent a stage actively playing field are not allowed.

The proposed rules have been unveiled at a time when DPIIT is also trying to roll out a in depth e-commerce policy aimed at addressing the regulatory challenges sector. A senior governing administration formal explained to Business Common that the e-commerce policy will be implemented by generating variations in the International Direct Investment decision rules, buyer protections rules as properly as Information and facts Engineering Act.

The recommendations also state that e-tailers will now have to send a notification and recommend “alternatives” before goods are obtained by shoppers to give a reasonable option to products created in India. They will not only have to rank products but also have to arrive up with a framework this sort of that the rating does not discriminate in opposition to domestic products and sellers.

Business Common noted that the Centre may tighten the “country of origin” norms for e-commerce players in a bid to press the sale of regionally generated products on their platforms that could be carried out by way of amendments to the Buyer Safety Principles.

E-tailers simply cannot mislead shoppers by manipulating research results on their platforms. They will have to guarantee that marketplaces do not use any information and facts collected by way of their platform for unfair benefit of their linked enterprises. In addition to, no marketplace e-commerce entity shall provide products or services to any man or woman who is registered as a vendor on its platform.

E-commerce companies engaged in cross-advertising of products or services will have to disclose to their consumers, by supplying the title of the entity supplying info for cross-advertising, as properly as the info employed for cross-advertising on the platform. Cross-advertising is a advertising and marketing practice of advertising complementary goods to buyers, therefore obtaining them to order extra. Selling goods to a buyer by “deliberate misrepresentation” of information and facts about the products is also not allowed.

Comparable to the freshly notified Information and facts Engineering (Intermediary Recommendations and Electronic Media Ethics Code) Principles, 2021, less than the IT Act, the Buyer Safety Principles are proposing a grievance officer, a main compliance officer and a 24×7 nodal officer to be appointed by e-commerce firms. Compliance of these requirements has currently caused a storm between the governing administration and social media firms running in the region.

“By necessitating e-commerce entities to sign-up with the DPIIT and appoint a main compliance officer, nodal officer and grievance officer who are citizens of (and resident in) India, the proposed rules look for to maintain e-commerce entities in the region accountable. At 1st look, it will be fascinating to see how almost these variations are implemented,” Archana Tewary, lover, J Sagar Associates.

In addition, a clause on logistics has been included: “No logistics support company of a marketplace e-commerce entity shall offer differentiated treatment between sellers of the exact same category. Supplied that each individual logistics support company of a marketplace e-commerce entity shall offer a disclaimer like conditions and disorders governing its romance with sellers on the marketplace e-commerce entity platform, a description of any differentiated treatment which it provides or may give between sellers of the exact same category,” the new rules suggest.

Amazon India, for illustration, has its possess logistics arm, and the provision appears to be aimed at guaranteeing this sort of logistics vendors are not presented choice over other folks. “LocalCircles has carried out substantial operate with the Office of Buyer Affairs given that 2017 to carry out buyer-centric e-commerce rules and is delighted to see quite a few of those people suggestions around finest before dates, vendor information and facts accessibility to buyer, and many others., staying involved,” said Sachin Taparia, founder & chairman, group social media platform LocalCircles.

“Looking at the proposed rules, nonetheless, from the lens of a tiny organization (MSME and start off-ups in the e-commerce sector) quite a few of whom are on LocalCircles, a superior little bit of operate nevertheless requirements to be carried out to guarantee these rules operate for them, and not get absent their aggressive differentiators or make executing organization challenging,” he included.

“Every e-commerce entity shall, as before long as possible, but not later than 72 hrs of the receipt of an order, offer information and facts less than its manage or offer support to the governing administration company which is lawfully authorised for investigative or protecting or cyber stability routines,” the rules said.

“Since the notification of rules in 2020, the governing administration has been given many representations from aggrieved shoppers, traders, and associations complaining in opposition to popular dishonest and unfair trade methods staying observed in the e-commerce ecosystem….The swift progress of e-commerce platforms has also brought into the purview the unfair trade methods of the marketplace e-commerce entities participating in manipulating research consequence to encourage specific sellers, preferential treatment to some sellers, indirectly running the sellers on their platform, impinging the totally free option of shoppers, advertising products close to expiration and many others,” the ministry said.