The union government has proposed some major changes to India’s Consumer Protection (E-commerce) Rules, 2020 that will impact major players like Amazon and Flipkart. If these strict norms are enforced, eCommerce platforms will be barred from holding flash sales and will have to undertake strict measures to curb preferential selling.
A flash sale will include the promotion of deep discounts and offers, and also of reduced prices for a certain period of time on select goods and services. Such flash sales are major traffic pullers for e-commerce platforms, especially during festive sales, and this restriction is bound to have a serious impact.
The new changes require e-commerce platforms to have ranking parameters that don’t discriminate against domestic goods and sellers. They will have to ensure that consumers aren’t misled by manipulated search results.
To comply with the new rules, every e-commerce platform in India will need to register Department for Promotion of Industry and Internal Trade (DPIIT) and will have to ensure that the registration number is “prominently displayed to its users”. It will also have to develop an “adequate grievance redressal mechanism” and appoint a Chief Compliance Officer.
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The e-commerce websites will have to take responsibility for misleading adverts on their platforms and will share liability in case a seller fails to deliver goods or services “due to negligent conduct or omission”.
E-commerce entities will be barred from using the data collected for the unfair advantage of related parties and associated enterprises who share a common director, managing partners or even a common chain or shareholders that have 10% or more stake in the company.
All of these proposed changes are in response to the “countless complaints” that the government has received from consumers, traders, and associations against unfair practices and cheating prevalent on e-commerce platforms. The Department of Consumer Affairs has sought feedback on the proposed changes to Consumer Protection rules by July 6.