Ecommerce Platforms May Need To Take User Consent To Share Personal Data

In order to protect user privacy and prevent misuse of information and unauthorised data sharing, the government is looking at making it mandatory for ecommerce companies to seek consent from users to share their personal data. 

The Ministry of Consumer Affairs is working on formulating detailed guidelines on the issue, Business Standard reported. The guidelines will also be a part of Consumer Protection (E-commerce) Rules.

“Apart from the consent factor, ecommerce companies will have to adhere to the personal data protection law, which is being rewritten by the Ministry of Electronics and Information Technology,” a senior government official told Business Standard. 

India does not have a data protection law currently as the government withdrew the Data Protection Bill in August. It plans to come out with a new Bill with revised data protection framework, and it is expected to be tabled in the Parliament during the Budget Session next year.

The ecommerce companies will have to update their technology to comply with the new rule, if it comes into effect. In addition, consumers will have the option to take action if the platforms don’t comply with the rules.

The ecommerce platforms are looking at a much-stringent regulated era as the Bureau of Indian Standards (BIS) is also looking at marking independent and reward-based online reviews separately.

The BIS has suggested that the online sites administrators should make it easier for consumers to differentiate between authentic independent and reward-based reviews. It has further suggested that ratings collected with rewards should not be accounted for when calculating a product’s overall rating or service. 

The ecommerce industry in the country is dominated by Flipkart and Amazon. Both the companies have been under scrutiny of various agencies for alleged violations of laws. 

Amazon and Flipkart are also facing competition from startups like Meesho and corporate groups like Reliance and Tata in the country.

In June 2021, the government released draft ecommerce rules to better regulate the industry. However, the final regulations are yet to be finalised. The draft rules were criticised by many industry experts and stakeholders. Meanwhile, the government has held several rounds of discussion with stakeholders on various issues.

According to an Inc42 report, India’s ecommerce market is estimated to reach a size of $400 Bn by 2030 from $100 Bn currently. The total number of online shoppers is projected to rise to 350 Mn by 2025 from 165 Mn currently. In addition, ecommerce continues to be one of the highest funded sectors, and has produced 23 unicorns and 14 soonicorns so far.