Key highlights of The Consumer Protection (E-Commerce) Rules, 2020

On 23 July, 2020 The Ministry of Consumer Affairs, Food and Public Distribution brought into force the Consumer Protection (E-Commerce) Rules, 2020 ("E-Commerce Rules"). The E-Commerce Rules aims at regulating all E-Commerce entities in India as well as entities set up abroad which are not established in India, but systematically offer goods or services to consumers in India. Here are some key highlights of the E-Commerce Rules. Here are some of the key takeaways from the Rules:

Defining E-Commerce Entity:

Under the E-Commerce Rules, an e-commerce entity is defined as any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity.

An e-commerce entity shall be a company incorporated either under the Companies Act, 1956 or the Companies Act, 2013. It may also be a foreign company covered under clause (42) of section 2 of the Companies Act, 2013 or an office, branch or agency outside India owned or controlled by a person resident in India as provided in sub-clause (iii) of clause (v) of section 2 of the Foreign Exchange Management Act, 1999.

Further these e-commerce entities have been divided into two subcategories:

1. The first category is identified as an Inventory E-commerce entity which means an e-commerce entity which owns the inventory of goods or services and sells such goods or services directly to the consumers and shall include single brand retailers and multi-channel single brand retailers.
   

2. The second category is of Marketplace E-commerce entity which refers to an e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and seller.

Duties of E-commerce entities:

The E-commerce Rules further shed light on the duties of e-commerce entities, these include:

1. An e-commerce entity should provide its legal name, address of its headquarters and all its branches, detail of its website and contact details on its platform in a prominent manner.
   

2. An e-commerce entity should not be involved in unfair practices on its platform or otherwise.
   

3. Every e-commerce entity should establish a grievance redressal mechanism and appoint a grievance officer for handling consumer complaints in India. In cases where e-commerce entities offer imported goods or services for sale, the details of such importer or seller should be mentioned on its platform.
   

4. An e-commerce entity shall not impose cancellation charges on consumers cancelling 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. Every e-commerce entity shall only record the consent of a consumer for the purchase of any good or service offered on its platform where such consent is expressed through an explicit and affirmative action, and no such entity shall record such consent automatically, including in the form of pre-ticked checkboxes.
   

6. An e-commerce entity shall only record the consent of a consumer for the purchase of any good or service offered on its platform where such consent is expressed through an explicit and affirmative action, and no such entity shall record such consent automatically, including in the form of pre-ticked checkboxes.
   

7. Manipulation and discrimination by e-commerce entities should be strictly prohibited. E-commerce entities should also not discriminate amongst consumers of the same class. They should also not manipulate the price of the goods or services offered on its platform 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.

Guidelines for marketplace and inventory e-commerce entities:

The E-Commerce Rules state various guidelines specifically for marketplace and inventory e-commerce entities to ensure consumers are given a correct representation of the products or services to be purchased. Some of the guidelines include:

1. Both the entities have to give clear, accurate and accessible representation of its platform with regards to certain factors. For instance, a marketplace e-commerce entity should provide details 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. Similarly, an inventory e-commerce entity should provide accurate information related to return, refund, exchange, warranty and guarantee, delivery and shipment, cost of return shipping, mode of payments, grievance redressal mechanism, total price in single figure of any good or service along with the breakup price for the good or service, showing all the compulsory and voluntary charges etc.
   

2. An inventory e-commerce entity shall not falsely represent itself as a consumer and post reviews about goods and services or misrepresent the quality or the features of any goods or services.
   

3. Every marketplace e-commerce entity shall take reasonable efforts to maintain a record of relevant information allowing for the identification of all sellers who have repeatedly offered goods or services that have previously been removed or access to which has previously been disabled under the Copyright Act, 1957, the Trade Marks Act, 1999 or the Information Technology Act, 2000.
   

4. Every inventory e-commerce entity shall ensure that the advertisements for marketing of goods or services are consistent with the actual characteristics, access and usage conditions of such goods or services.

Conclusion:

The E-Commerce Rules is a much needed legislation in today’s day and age due to the rapid growth of the e-commerce sector in India. It takes into account most of the challenges faced by consumers on e-commerce platforms and provides adequate remedy of the same under the Consumer Protection Act, 2019.

One of the most praiseworthy steps taken is the establishment of a grievance redressal mechanism and the time period prescribed for resolving the complaints filed under it. This will ensure less fear amongst consumers when it comes to purchasing goods and services online and ensures accountability on part of the e-commerce entities. The E-Commerce Rules will surely provide suitable respite to the Indian consumers who have been wronged on such platforms.