Proposed e-commerce regulations ‘missing from final structure’ could negatively affect consumer interest – Technology News, Firstpost



The proposed e-commerce provisions could negatively affect consumer interest while creating a high level of uncertainty and increasing the compliance burden not only for e-commerce companies but also for MSME companies providing services to online shops, according to IAMAI.

draft rules on e-commerce published by the government proposes on 21 June a ban on fraudulent quick sales and misuse of goods and services on e-commerce platforms. The appointment of the Central Supervisory Authority / Complaints Officer is one of the main changes proposed in the rules on consumer protection (e-commerce) in 2020.

‘Draft e-commerce rules are unclear’

The Internet and Mobile Association of India (IAMAI) stated in its draft regulation that the proposed changes raise a number of concerns and ambiguities from an e-commerce perspective, which are also likely to have unintended negative consequences for consumers.

“Uniform application of these changes / rules to all e-commerce models would not be possible, it is far from ideal, would affect both businesses and consumers and create great uncertainty in a still growing sector and would benefit from light hand regulation,” it added.

The association noted that the changes do not provide a level playing field between e-commerce and e-commerce.

According to the changes, e-commerce platforms have a number of limitations and an increased burden of compliance. However, the same cannot be applied to brick-and-mortar stores, it said.

The industry body noted that implementing the changes in their current form “will significantly increase the compliance burden for small and medium-sized enterprises and start-ups that do not even operate in e-commerce but provide e-commerce services”.

IAMAI has also called for the abolition of the concept of “liability” as it dilutes the intermediary’s safe haven in accordance with market-based requirements under IT law and foreign direct investment policy.

One proposal states that a “spare liability” applies to a marketplace-specific e-commerce entity if a seller registered on its platform does not deliver the goods or services ordered by the consumer through negligence, negligence or an act of such a seller.

“It opens the gates to unscrupulous claims against e-commerce units. It can significantly change the e-commerce landscape in India and prevent innovation and access for small sellers to marketplaces (which e-commerce marketplace units may not have on board. Seizure of liability),” it states.

However, the diluted version of this provision can be applied to inventory-based e-commerce units because they control, own and manage the inventory of goods / services sold.

“ May increase compliance liabilities ”

Earlier, the Indo-American Chamber of Commerce (IACC) had said the proposed regulations could increase compliance obligations, affect the global investor sentiment about facilitating business in the country, and severely undermine e-commerce growth.

Gopal Jain, a senior Supreme Court attorney, had said holding e-commerce companies accountable for goods sold by some other vendors and the proposed restrictions on related party sales of goods on the platform would harm MSMEs.

“Missing final structure”

The Digital Rights Group, the Internet Freedom Foundation (IFF), says that while the new rules are intended to allow consumers to abuse, they are losing ground. IFF says the rules do not provide a definitive structure, which in turn raises fears of implementation. IFF has also sent some suggestions to fill the gap in the rules:

On Monday, August 5, the government extended the deadline for public comments on the proposed changes to the rules on consumer protection (e-commerce) in 2020. Previously, the date for public comment on the draft e-commerce regulation was 6 July.

‘More discussion needed’

The Alliance of Digital India Foundation (ADIF) – a group of domestic startups – welcomed the proposals, saying they would protect consumers ’interests in the long run.

Eliminating discrimination against Indian sellers and eliminating customer and market manipulation by major e-commerce players are powerful, it added. The organization reported that discounts are mostly offered for slow-moving and perishable Warehouses, but a deep discount can kill good and / or competing products.

“While larger players can resort to such tactics and survive to create market position, smaller players can’t afford these discounts any longer and they leak out of existence,” it states.

ADIF said it supported the government’s efforts to protect small and medium-sized sellers.

“However, the rules ignore ensuring the friendliness of small and medium-sized players. Solo preneurs and female entrepreneurs in particular deserve special attention and attention.” ADIF supports zero paper work for them up to the GST limit (20 Rh). a compliance requirement for all sellers with a revenue of at least EUR 1 million “, it states.

ADIF also stressed that it is difficult for smaller e-commerce units to designate three separate individuals as the compliance manager, node liaison, and permanent appellant.

It suggested that until DPIIT registrations are completed, the founders should be allowed to act as the above-mentioned officers of the company. Depending on the specific turnover, e-commerce units should have the flexibility to designate a single person who can act as a liaison for the nodes as well as a compliance officer and resident abuser.

Fees charged by e-commerce entities ADIF said e-commerce entities should charge these fees (when a customer cancels an order) only if it offers similar cancellation fees when a seller or e-customer cancels payments. trading company.

“However, e-commerce units can be exempted from this rule if sellers charge cancellation fees and e-commerce units only pass the fees on to the customer,” ADIF CEO Sijo Kuruvilla George said.

In its proposals, ADIF also called on the Ministry to reconsider offering liability to e-commerce units in marketplaces. “This liability provision violates the principle of the safe harbor rule, which acts as a protection for intermediaries under section 79 of the IT Act,” it states. It noted that more consideration is needed to create regulations to protect the interests of Indian marketplaces that have invested in Indian associates or private brands.

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