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E-Commerce Guidelines for Consumer Protection 2019

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August 10, 2019

Why in news?

The Consumer Affairs Ministry recently released the E-Commerce Guidelines for Consumer Protection 2019.

What necessitated this?

  • India’s e-commerce sector is poised to grow four times to $150 billion by 2022.
  • However, it is still a work in progress when it comes to safeguarding customer interest.
  • Consumers are still compelled to take wild chances in online transactions.
  • There is little they can do if their calls go wrong, as returns and reimbursements are risky and cumbersome.
  • There are no authentic ways to figure out if product reviews, ratings or even discounts are genuine.
  • Given these, a set of guidelines to protect the interests of consumers was a much called-for one.

What are the key guidelines?

  • An e-commerce entity shall not influence the price of the goods or services.
  • It should not adopt any unfair or deceptive methods to influence transactional decisions of consumers.
  • Entities are also not to falsely represent themselves as consumers and post reviews about goods and services.
  • The guidelines on returns and refunds are designed to favour consumers.
  • Marketplace entities (e-commerce platforms) will not be able to buy more than 25% from a single vendor.
  • They can also not give discounts on products or sell the goods of the companies in which there is equity participation by the marketplace entity.

What are the challenges?

  • Clearly, the Ministry’s thinking seems to be in line with the Centre’s approach to regulating the fast-growing e-commerce sector.
  • However, it is challenging to balance between regulating consumer interests and encouraging innovation and investment, without discriminating against a particular class of investors.
  • The DPIIT (Department of Promotion of Industry and Internal Trade) is also framing an e-commerce policy and has put up the draft for comments.
  • The draft talks about -
  1. retaining ownership and control of data generated within the country (data localisation)
  2. rigorous monitoring of cross-border imports
  3. placing the responsibility of consumer protection on the intermediary
  4. addressing the issue of piracy
  • In this context, the element of indecision over data localisation requirement is still a worry.
  • Both the DPIIT and MeitY (Ministry of Electronics and Information Technology) are attempting to make a case for data localisation in the e-commerce policy and the data protection policy, respectively.
  • The RBI is also pursuing this in the case of payment systems.
  • These attempts have predictably resulted in a lot of protests from the EU and US entities.
  • Besides, the new guidelines had raised concerns among foreign e-tailers.
  • They feel that the rules would jeopardise their business models and could cost them time and money.
  • Given all these, the Centre should take a call soon on the e-commerce policy, balancing the priorities of the stakeholders.

 

Source: Business Line

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