Govt Directs Ecommerce Companies To Appoint Nodal Officer

The government of India has asked ecommerce companies to appoint a nodal officer to ensure compliance with the new consumer protection rules, which will be applicable to ecommerce entities registered in India as well as those registered abroad but offering goods and services to Indian consumers.

The notice issued by the ministry of consumer affairs of India further adds that these rules will apply to all ecommerce entities incorporated under the Companies Act of 1956 or under the Companies Act of 2013 or any forign company covered under clause (42) of Section 2 of the Companies Act of 2013 or an officer, branch or agency outside India owned or controlled by person resident in India as provided in the Foreign Exchange Management Act of 1999.

This new sub rule has been included in the Consumer Protection (E-Commerce) Rules of 2020 and has come into effect earlier this week (May 17), according to a notification signed by Anupam Mishra, joint secretary of ministry of consumer affairs in India. The consumer protection rules for ecommerce regulate every person involved in a transaction of buying and selling goods and services over the digital or electronic networks including marketplace ecommerce entities, inventory-based ecommerce entities and single brand or multi-brand etailers (except individual sellers).

The rules were made under the provisions of Consumer Protection Act Of 2019, which regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. The notification by the ministry reads, “it (e-commerce entity) shall appoint a nodal officer or an alternate senior designated functionary who is resident in India, to ensure compliance with the provisions of the Act or the rules made thereunder.”

Under the Consumer Protection (E-Commerce) Rules of 2020, the ecommerce entities have to display ‘country of origin’ on the products being sold on their platform. Besides this, they also have to display the total price of goods and services offered for sale along with a break up of other charges, they are also required to mention ‘expiry dates’, details about logistics — including return, exchange, refund, warranty and guarantee, delivery and shipment — so that a customer could make informed purchases.

The ecommerce entities are also not allowed to manipulate the price of goods and services offered on their platforms to gain unreasonable profit and discriminate between consumers of the same class or make any arbitrary classification of consumers affecting their rights under the Act. Besides this, in case of any complaints, ecommerce companies would have to provide a ticket number so that consumers can keep a track of the status of complaints.