Centre Considers Changes In Draft Ecommerce Rules

The central government is considering to add some changes in its consumer protection (eCommerce)Rules, 2020 to bring further clarity into flash sales and party sales after receiving consultation from industry experts and ecommerce players. 

According to a Business Standard report, government officials have informed the daily that the revised rules will be notified soon and will provide clarification on the ecommerce rules. The contentious rules include ban on flash sales, informing consumers purchasing a foreing product of domestic alternatives, appointment of grievance officers among others. The draft rules have drawn concerns from ecommerce giant Flipkart, Amazon along with Reliance Retail and Tata Group. 

As per the rules, ecommerce companies have been tasked to ensure that none of their “related parties and associated enterprises” are listed as sellers on their platforms, and no related entity should sell goods to an online seller operating on the same platform. The rules specifically state that related parties or associated enterprises should do nothing that the ecommerce entity cannot do itself. 

Ecommerce platforms will also be required to  appoint a nodal contact person for 24×7 coordination with law enforcement agencies and officers to ensure compliance to their orders. 

Last month, industry associations including Confederation of All India Traders (CAIT), Internet and Mobile Association of India (IMAI), Confederation of Indian Industries, PHD Chamber of Commerce and Industry, among others including ecommerce giants Flipkart and Amazon sent their response to the draft policy that was out for publication in June. The government had already extended the deadline for feedback on the draft ecommerce rules to July 2021. 

A government official informed the daily that  there will be a rewording of some of the rules and the nuances will be revealed in the final draft, bringing more clarity on the policy. The final draft is expected to be after the Parliament session.

The new rules are in place to bring more scrutiny in the booming ecommerce space of the country, as well as allowing a level playing field to both ecommerce giants and small businesses. Last week, minister of state of commerce and industry Som Prakash told the Rajya Sabha  that the government has received multiple complaints from Indian traders, retailers on deep discounts, predatory pricing, and misuse of market dominance against ecommerce companies such as Flipkart and Amazon. The government has forwarded these complaints for necessary examinations and investigations. 

Prakash responding to Lok Sabha has said that the government has also received complaints against ecommerce companies allegedly violating foreign direct investment (FDI) policy. One of the concerns for retailers and online sellers is that ecommerce marketplaces continue to engage in inventory-based models despite it being against current FDI norms.