Govt Sets Up Ecommerce Regulator For Consumer Redressal

The parliament has passed the Consumer Protection Bill, 2019 yesterday on August 6, which seeks to set up a regulatory body Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.

The regulatory body will be able to initiate class action, including enforcing recall, refund and return of products. An exclusive law dealing with product liability has also been introduced, with this the sellers will now be responsible to compensate for injury or damage caused by defective product or deficiency in services. 

Ecommerce companies have been time and again alleged of selling counterfeit products and also of delivering damaged or defective products. An online seller’s body, the All India Online Vendors Association (AIOVA), had earlier raised concerns over Amazon India’s inaction pertaining to the sale of fake products on its platform.  

Further, leading Chinese ecommerce platforms such as JD, Jumei, Jingdong and Lashou have also been found selling fake products in the past. Alibaba has been accused of faking data to show its lead among other competitors.

The bill also have provisions for deterrent punishment to check misleading advertisements and adulteration of products. These regulations will encompass both ecommerce and direct selling businesses. 

Union Minister of Consumer Affairs, Food and Public Distribution Shri Ramvilas Paswan said, “the new legislation would ease the overall process of consumer grievance redressal.” 

Ecommerce Regulations In India

This bill is the latest among the slew of regulatory measures introduced in the ecommerce industry. Earlier this year, Indian government has implemented the FDI in ecommerce guidelines which had sought to enable a level playing field for online sellers and ecommerce marketplaces.

The rules had noted that a vendor will be considered “controlled” by an online marketplace operator if it sources more than 25% of its merchandise from an entity related to the ecommerce marketplace. It had also prohibited ecommerce marketplaces from directly or indirectly influencing the selling price of a product on their platform.

Earlier this week, the ministry of consumer affairs also proposed ecommerce guidelines for consumer protection, with a focus on B2C ecommerce companies. It had proposed that only entities registered in India should be able to carry out ecommerce businesses, among other provisions. 

To address consumer grievances, the new draft had asked for ecommerce companies to share details of grievance officer and his contact details as well as the mechanism by which users can notify their complaints about products and services availed through their website. The grievance officer will then have to redress the complaints within one month of the complaint.

The ministry of consumer affairs draft is seeking stakeholder comments till September 16. Further, the government has also been considering an ecommerce policy for the past few months, since the DPIIT has released the draft ecommerce policy in February. 

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