Govt Issues Draft Guidelines To Make Ecommerce More Accountable

Govt Issues Draft Guidelines To Make Ecommerce More Accountable

SUMMARY

The draft guidelines titled ‘E-commerce-Principles and Guidelines for Self Governance’ were prepared by the Bureau of Indian Standards (BIS)

The framework introduces three-phase principles covering pre-transaction, contract formation, and post-transaction stages for e-commerce operations

The Centre has proposed draft guidelines for ecommerce platforms, mandating self regulation measures to protect consumers from fraudulent practices in rapidly expanding online shopping space

The Centre has proposed draft guidelines for ecommerce platforms, mandating self regulation measures to protect consumers from fraudulent practices in rapidly expanding online shopping space.

The draft guidelines titled ‘E-commerce-Principles and Guidelines for Self Governance’ were prepared by the Bureau of Indian Standards (BIS) under the supervision of the food and consumer affairs ministry, seeking stakeholders comments by February 15.

“…the rise of e-commerce has introduced new challenges, particularly in terms of consumer protection and trust. The importance of clear and effective rules and norms for self-governance in e-commerce cannot be further emphasized in this context,” the draft said.

The framework introduces three-phase principles covering pre-transaction, contract formation, and post-transaction stages for e-commerce operations.

Pre-transaction requirements

Under this, the businesses should conduct thorough  KYC of business partners, especially third-party sellers. The draft also mandates detailed product listings which includes title, seller contact details, identification number, and picture and videos to help consumers assess product utility and features. 

Contract formation

To maintain transparency, all ecommerce startups must record consumer consent, enable transaction review, and maintain transparent policies for cancellation, returns, and refunds, the draft outlined. 

For secure and fair payment practices, it would be compulsory for all ecommerce platforms to have multiple payment options which includes credit/debit cards, mobile payments, e-wallets, and bank transfers. 

For imported goods, platforms must display importer, packer, and seller details prominently. During contract formation, platforms must record consumer consent, enable transaction review, and maintain transparent policies for cancellation, returns, and refunds. The proposed rules also mandates secure payments by having payment systems with encryption and two-factor authentication. Moreover, cash-on-delivery must be processed as per consumer preference.

Post transaction

According to the draft, the platform will need to specify clear timelines for refunds, replacements, and exchanges, and have separate provisions for fake products. The proposal also implies to prohibit the sale of banned products. 

Before a seller is onboarded, the ecommerce company will have to prepare and share a list of banned products along with seller onboarding. 

Apart from the above suggestions, the draft also outlines general rules which includes having fair business practices, providing no favours to any particular seller on the platform. In case the ecommerce entity has a promotional contract with any brand, it should be clearly mentioned for the consumers to know. 

The development comes at a time when marketplace giants Amazon and Flipkart are at loggerheads with the Competition Commission of India (CCI)  where the former has alleged the companies are involved in anti-competitive practices. 

Moreover, the Confederation of All India Traders (CAIT) also said that both companies have been bypassing regulations by using proxy sellers to control inventory and dominate listings on their platforms. 

It also stated that such sellers benefit from reduced fees and exclusive product launches, while independent traders are burdened with significantly higher charges, distorting the competitive landscape.

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