The disparity and dichotomy between consumer protection laws applicable on brick-and-mortar firms & e-commerce firms had been a glaring gap for long. In a move to bring parity on both, the Government of India has proposed to issue fresh rules and recently circulated the Draft Consumer Protection (e-Commerce) Rules, 2019 (hereinafter ‘2019 Draft Rules’).
This primer seeks to outline the changes suggested in the 2019 Draft Rules as follows:
Every e-Commerce entity carrying out or intending to carry out e-Commerce business in India shall comply with all the conditions set out in Rule 3 of the said 2019 Draft Rules for the conduct of the e-Commerce business, namely-
With an exclusive focus on B2C e-commerce, the 2019 Draft Rules seek to address and prevent fraudulent and unfair trade practices in B2C e-commerce space. The 2019 Draft Rules inter-alia, obligate e-commerce entities to maintain a level-playing field and prohibits them to dominate the market by keeping lower prices of the goods and services that are listed for sale on their website.
The e-commerce 2019 Draft Rules oblige ecommerce entities to ensure authenticity of the goods sold on their platforms. Additionally, the 2019 Draft Rules contain a timeline of 14 days for the e-commerce entities to accept the return of spurious or counterfeit goods and refund the underlying purchase amount, which have raised serious concerns regarding additional compliance costs. The e-Commerce entities are required to pro-actively ensure that their platforms do not facilitate counterfeiters.
A new principle of ‘unfair contract’ has been introduced under the Act enabling consumers to file complaints and challenge contracts deemed to be unfair or arbitrary to the rights of the consumers. With e-Commerce websites dependent on contractual terms for mitigating risk exposure and safeguarding interests against any third-party liabilities these terms and conditions are generally in the form of a click wrap agreement and become binding on the consumer at the time of the registration on the platform and/or the purchase of goods or services on such platform. Touted as standard terms and conditions which a consumer has to accept are now required to satisfy the scrutiny of the 2019 Draft Rules. including compelling e-commerce entities to display the terms of their contact on the online platform to enable transparency.
The 2019 Draft Rules under rule 6 oblige ecommerce entities to appoint Grievance Officers and publish their contact details while elaborating on the procedure through which the consumers can raise complaints. The 2019 Draft Rules stringently obligate the Grievance Officer to resolve/redress the complaint within a limited time of one month from the date of receipt of the complaint to redress or provide a solution to it. The 2019 Draft Rules also identify other means to file the complaints i.e. through phone, email or website. The 2019 Draft Rules alongwith Consumer Protection Act, 2019 (“Act”) seek to bring sweeping changes in consumer law regime in India, moving from a regime based on caveat emptor (let the buyer beware) to caveat venditor (let the seller beware). The 2019 Draft Rules seeks to boost further consumer confidence and security and strive to enable a safer legal regime by curbing malpractices in e-Commerce and weed out habitual offenders engaged in defrauding consumers by taking advantage of the gaps in the consumer law regime in the e-Commerce space. The 2019 Draft Rules, if notified, would help in further widening of the ecommerce space. The Act has also proposed establishment of a central regulator i.e. Central Consumer Protection Authority (CCPA), to address issues related to consumer rights, unfair trade practices, misleading advertisements and impose penalties for selling faulty and fake products. Broadly, regulatory moves of CCPA will be directed towards the manufacturers, sellers and service providers.
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