The Ministry of Consumer Affairs, Food And Public Distribution on 23rd July 2020 notified the Consumer Protection (E-Commerce) Rules, 2020. The scope and applicability of the new rules are comparatively wider than its predecessors and would apply to all goods and services bought or sold over the digital or electronic network including digital products;  all models of e-commerce, including marketplace and inventory models of e-commerce;  all e-commerce retail, and all forms of unfair trade practices across all models of e-commerce. The only exception given is in case an activity is carried out in a personal capacity not being part of any professional or commercial activity undertaken on a regular or systematic basis.

As per the new Consumer Protection (E-Commerce) Rules, 2020, every e-commerce entity is supposed to provide to its users, its legal name, information with regards to its headquarters and branches, website information and its contact details including customer care and grievance officer’s details in a clear and accessible manner. This is important especially since the number of spurious e-commerce websites has increased in the recent past.

Though the new rules are not extremely different from its predecessors in most aspects, there are most certainly some consumer-friendly additions in the Consumer Protection (E-Commerce) Rules, 2020, some of which are as follows:

  1. Every e-commerce entity shall ensure that the consumer complaint is acknowledged within forty-eight hours and redresses the complaint within one month from the date of receipt of the complaint.
  2. When an e-commerce entity offers imported goods or services for sale, it would now have to mention the name and details of any importer from whom it has purchased such goods or services, or who may be a seller on its platform.
  3. It also mentions that the e-commerce entity would try to become a partner in the convergence process of the National Consumer Helpline of the Central Government.
  4. No e-commerce entity can now impose cancellation charges on consumers canceling after confirming purchase unless similar charges are also borne by the e-commerce entity if they cancel the purchase order unilaterally for any reason.
  5. From now on, every e-commerce entity will record the consent of a consumer for the purchase of any good or service offered on its platform only through an explicit and affirmative action, and no such entity can record such consent automatically, including in the form of pre-ticked checkboxes.

[This is helpful for many a time, customers would end up accidentally placing orders due to an ambiguous checkout policy after which they had to pay a cancellation charge as well]

  1. No e-commerce entity can now manipulate the price of the goods or services offered on its platform in such a manner as to gain unreasonable profit by imposing on consumers any unjustified price having regard to the prevailing market conditions, the essential nature of the good or service, any extraordinary circumstances under which the good or service is offered, and any other relevant consideration in determining whether the price charged is justified and also they cannot discriminate between consumers of the same class or make any arbitrary classification of consumers.

[One concern with this clause is that the terms unreasonable and unjustified are not defined and this clause may pose a problem while practical implementation of the same. Another possible concern can be that it hampers the free market pricing of goods and services]

 In addition to making some significant changes with respect to the customer complaint redressal process, the new rules also aim at achieving greater transparency by e-commerce entities

-By informing the customer about the sellers offering goods and services, including the name of their business, whether registered or not, their geographic address, customer care number, any rating or other aggregated feedback about such seller, and any other information necessary for enabling consumers to make informed decisions at the pre-purchase stage. The customer can even request further information about the seller from the e-commerce marketplace entity if the need be.

– By providing an explanation of the main parameters which, individually or collectively, are most significant in determining the ranking of goods or sellers on its platform and the relative importance of those main parameters through an easily and publicly available description drafted in plain and intelligible language.

– By include in its terms and conditions generally governing its relationship with sellers on its platform, a description of any differentiated treatment which it gives or might give between goods or services or sellers of the same category.

The new rules also define the duties of sellers on an e-commerce marketplace, which includes that:

– No seller offering goods or services through a marketplace e-commerce entity shall adopt any unfair trade practice whether in the course of the offer on the e-commerce entity’s platform or otherwise.

– No such seller shall falsely represent itself as a consumer and post reviews about goods or services or misrepresent the quality or the features of any goods or services.

– No seller offering goods or services through a marketplace e-commerce entity shall refuse to take back goods, or withdraw or discontinue services purchased or agreed to be purchased, or refuse to refund consideration if paid, if such goods or services are defective, deficient or spurious, or if the goods or services are not of the characteristics or features as advertised or as agreed to, or if such goods or services are delivered late from the stated delivery schedule: Provided that in the case of late delivery, this sub-rule shall not be applied if such late delivery was due to force majeure.

– It is now a duty of the seller to share details such as the country of origin of the goods and services offered for sale.

In the recent past and especially in the current scenario, e-commerce entities have seen a multifold growth. With the rise in e-commerce also comes the possibility of rising unfair trade practices on such platforms. Therefore, it was imperative to come up with a new set of rules to make sure consumer interest is not sacrificed. Consumer Protection (E-Commerce) Rules, 2020 provides a framework to regulate e-commerce in a more efficient and transparent manner.