New ecommerce rules direct Amazon, Flipkart, others to provide more information on products, sellers

The government's new consumer protection policy aims to empower consumers by helping them make well-informed purchases, as well as promote more Made in India products and brands.

25th Jul 2020
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In an attempt to create more transparency for buyers, ecommerce platforms selling in India will have to start furnishing more details about products, their source, and sellers, among other things, as per the new 'Consumer Protection (E-Commerce) Rules, 2020' that was notified on Thursday.


The effort to create consumer awareness comes against the backdrop of the Modi government’s push to promote Indian products over imported ones in order to boost the startup and the MSME sectors, which took massive hits following the onset of the coronavirus pandemic.


The government has also been working on policy overhauls to reduce the stronghold international players such as Amazon have in India, and guide more and more consumers towards homegrown products and brands.


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Regulators have particularly taken a hardline stance against predatory pricing practices by Amazon, as well as Flipkart and other ecommerce companies which have, in their opinion, killed small businesses, including kiranas, although companies are trying to bring these units under their fold via various programmes.


The new Consumer Protection Act of 2019 stipulates that ecommerce firms must provide all information relating to a product, including its country of origin, expiry date, seller information, verified images, and other relevant content, its return, refund, exchange, warranty, and guarantee policies, as well as information on delivery and shipment, modes of payment, and grievance redressal mechanisms, among several other things.


Ecommerce firms have been directed to take “reasonable efforts” to maintain a record of sellers who offer goods or services that have been previously removed from the marketplace for violating Copyright, Trade Marks or the Information Technology Acts.


“No ecommerce entity shall adopt any unfair trade practice, whether in the course of business on its platform or otherwise,” the draft rules under the Consumer Protection Act for ecommerce companies read.

The Act prohibits sellers from posting fake customer reviews about their own goods or services, or misrepresent their qualities or features. Amazon, in particular, is riddled with sellers paying real customers money - up to Rs 1,200 - for writing positive reviews, a Daily Mail investigation found last year.


Sellers have also been strictly warned against “manipulating the price” of the goods and services offered on their platforms to gain unreasonable profit.


The CPA lays out several other such rules - such as sharing shipping details with customers, indicating which online payment methods are the safest to use, displaying the total price of a good along with the breakup of taxes, delivery, handling and conveyance charges, generating a ticket number for complaints, etc - the violation of which will attract penalties as decided by the consumer protection authority and consumer courts.


On July 20, Consumer Affairs Secretary Leena Nandan had said rules have been finalised after taking inputs from the Department for Promotion of Industry and Internal Trade, under the aegis of the commerce ministry, so that they do not contravene with the overall e-commerce policy.


(With inputs from PTI)

(Edited by Megha Reddy)

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