Govt not to seek disclosure of flash sales from etailers; to act on consumer complaints

The Centre on Tuesday said it will not seek the disclosure of flash sales from ecommerce players to regulate the fraudulent sale of goods and services, but will take appropriate action as per the law on consumer complaints.

Discount sales that benefit maximum to consumers will continue, but not fraudulent flash sales on the ecommerce platforms, the government said, adding that the etailers need not be "anxious" about the draft rules.

Ban on fraudulent flash sales, mis-selling and appointment of chief compliance officer/grievance redressal officer — are among key amendments proposed to the Consumer Protection (e-commerce) Rules, 2020, on which the government has sought public comments by July 6.

"We are not going to seek disclosure of flash sales. We are with sales that benefit maximum consumers. If someone wants to complain, there should at least be a provision," said Nidhi Khare, Additional Secretary in the Consumer Affairs Ministry.

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She also made it clear that the ministry "will not regulate" the trade on ecommerce platforms. And the ecommerce players need not be anxious about the proposed changes to the rules.

"We will take action on fraudulent flash sales if we receive any complaints or CCPA (Central Consumer Protection Authority) can take suo moto cognizance," she said while briefing the media on this issue.

Further, Khare said such fraudulent flash sales are also being evaluated in western countries because many times shell companies organise flash sales without any inventory, which is against the interest of consumers and limits fair competition.

"This is a step taken in time. These markets are evolving, consumer preferences are evolving. We have to keep pace with the changes so that consumers are not duped," she added.

The government assured that discount sales will continue. "Such competition actually helps the business overall to bring goods at better prices to consumers. We are not against that," she said.

Khare is also the chief commissioner of the CCPA.

She said the consumer affairs ministry's role is to safeguard the interest of consumers and hence the draft rules. Otherwise, the Department for Promotion of Industry and Internal Trade (DPIIT) is the main regulator.

Among other amendments, the government has proposed registration of every ecommerce entity, which intends to operate in India with the DPIIT.

When asked why the proposed amendments do not specify a time frame for the appointment of compliance officer and grievance redressal officer, the official said: "I take note of this point. We can change 'as soon as possible' to 'effective from the date of the notification".

Based on public comments from different stakeholders, the proposed amendments to the rules will further be modified, she said.

The proposed changes to the rules were necessary as ecommerce business in India is evolving and more consumers are shopping online, Khare noted.

"Initially, marketplaces started on a premise that they were only platforms, where buyers and sellers come and do transactions. Now ecommerce is evolving and they have their own private labels. It is because of this evolving situation, we thought we need to further strengthen. That's why we brought new features to protect consumers and encourage fair trade practices," she explained.

Asked why there is no regulation on cheap discount sales offered in offline markets, Khare said: "That is not true. Today, you have features of product liability for stores and anybody can sue them. Consumers can file if their rights are infringed. So, many cases are filed in consumer courts".

The Consumer Protection (E-Commerce) Rules, 2020 were first notified in July last year. Their violations attract penal action under the Consumer Protection Act, 2019.