The Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution, on August 02, 2019 have issued the e-commerce guidelines for consumer protection, 2019 (“Guidelines”) in order to safeguard the interest of the consumers. The Guidelines are open for views or comments from stakeholders and the deadline for such comments has, on September 16, 2019, been extended from September 16, 2019 to October 31, 2019. The Guidelines are only applicable to Business-to-Customer e-commerce entities. The Guidelines are also applicable to all B2C e-commerce entities involved in digital content products.
In this article, we shall discuss the salient features of the Guidelines as follows:
The e-commerce entity has been defined as a company or a foreign company, as defined in the Companies Act, 2013/1956 or an office, branch or agency as covered under FEMA 1999, owned or controlled by a person, resident outside India and includes an electronic service provider or a partnership or proprietary firm, whether inventory or market place model or both and conducting the e-commerce business.
All e-commerce entities carrying out or intending to carry out e-commerce business in India shall have to be a registered legal entity and shall be required to comply with the conditions mentioned in the Guidelines within 90 days. Further, the entities are required to submit a self-declaration confirming compliance of the Guidelines to the department. The Guidelines mandates that no e-commerce entity shall have a promoter of key managerial personnel who has been convicted of any criminal offence, punishable with imprisonment in the last 5 years by any Court of competent jurisdiction. Further, it is mandatory for the e-commerce entities to comply with the provisions of the Information Technology (Intermediaries guidelines) Rules, 2011 and in case of facilitation of any payments for sale, guidelines of Reserve Bank of India shall be complied with. All details about the sellers supplying the goods and services on an e-commerce platform (including identity of their business, legal name, principal geographic address, name of website, contact details, the products they sell) shall be displayed by an e-commerce entity on their website.
The e-commerce entity shall not indulge in any unfair trade practice that may influence the transactional decisions of consumers in relation to products and services or influence the price of the goods and services. Further, the e-commerce entity shall not be indulged in falsely representing the customers or posting false reviews on their behalf. The quality or features of the goods and services shall at no point be exaggerated or misrepresented to the customers by the e-commerce entity.
Any seller selling or advertising its product or services on an e-commerce platform shall have the following liabilities:
The Guidelines mandates that every e-commerce entity shall mandatorily publish on its website the name and contact details of the Grievance Officer. Further a clear mechanism is required to be stipulated on the website regarding the complaints and their redressal. The Guidelines mandates redressal of the complaint within one month from the date of receipt of such complaint by the Grievance Officer. An e-commerce entity shall ensure that the consumers are provided with the facility to get their complaints by various methods such as vide email, over the phone or on the website. Each complaint shall have a unique complaint number and the same shall be provided to the respective customer for the purpose of tracking the status of their complaint. Guidelines state that the consumers shall be provided with transparent and effective consumer protection that is not less than the level of protection offered in other forms of commerce. Such a statement is vague and subject to varied interpretations by various entities, thereby increasing the probability of its misuse. Further, each e-commerce entity is required to provide a mechanism or system wherein any grievance redress mechanism shall be permitted to be converged with National Consumer Helpline.
The Guidelines seem to be in clear compliance with Rule 11 of
Information Technology (Intermediaries Guidelines) Rules, 2011 (“Intermediary
Guidelines”). While the Intermediary Guidelines fail to provide a time
limit for redressal of a complaint and tracking of the status of each
complaint, the Guidelines have taken a step ahead to ease the process for the
consumers. These Guidelines once approved is likely to become part of rules to
the Consumer Protection Act, 2019, thereby having better enforceability in the
court of law.
While there already existed various similar governing laws for brick and mortar stores, new guidelines repeating the same could have been avoided by making adequate changes to the already existing law. However, it would be interesting to see how soon the Guidelines sees the light of the day and interpretation of the same by varied e-commerce entities.