'BIS ecommerce guidelines well-intentioned but need nuanced view': stakeholders
The effectiveness of the proposed framework will largely depend on its enforcement, adaptability, and ability to address the evolving challenges of the ecommerce landscape.
While the government’s draft guidelines for ecommerce platforms, aimed at introducing self-regulatory measures to protect consumers from fraudulent practices, are well-intentioned, they lack a nuanced understanding of ecommerce companies and their business models, according to industry stakeholders.
The draft by the Bureau of Indian Standards (BIS), titled ‘E-Commerce: Principles and Guidelines for Self-Governance,’ comes amid growing concerns over consumer protection and trust erosion. By setting clear norms, the BIS seeks to curb unethical practices while promoting transparency and accountability across platforms. Stakeholders involved in the segment are encouraged to provide feedback on the proposed norms before February 20, 2025.
The effectiveness of this framework will largely depend on its enforcement, adaptability, and ability to address the evolving challenges of the ecommerce landscape, said Sahil Arora, Partner at Saraf and Partners.
The government draft highlights that the growth of ecommerce has brought new challenges, particularly concerning consumer protection and trust. It emphasizes the need for clear and effective rules and standards for self-governance in ecommerce in this context.
The framework presents a three-phase approach, addressing the pre-transaction, contract formation, and post-transaction stages of ecommerce operations.
While the guidelines aim to foster consumer trust and ethical practices, some argue that certain new-age, innovative, and diverse business models of ecommerce companies may not have been adequately addressed, said an ecommerce founder, speaking on condition of anonymity.
The draft guidelines treat ecommerce as the primary choice for consumers, when this sector has less than 9% share when compared to other modes like physical retail. The guidelines are well intentioned but while implementing this, it can hamper the growth of the sector by creating many red-tapes, said the above quoted person.
Nonetheless, the guidelines require platforms to clearly disclose seller information, including details for grievances and customer support, ensuring that consumers have access to necessary resources.
Additionally, the guidelines emphasize compliance with data protection laws, restricting the use of personal data to disclosed purposes only. Transparency in consumer reviews and ratings is also prioritized, with platforms obligated to adhere to prescribed standards to ensure authenticity and reliability. Collectively, these measures are designed to create a trustworthy and accountable ecommerce ecosystem.
Arora added, “Although well-intentioned, these rules could potentially increase compliance burdens for ecommerce companies (especially newer startups). However, the long-term benefits of increased consumer trust may outweigh some of these compliance challenges if the guidelines are implemented in a fair and effective manner.”
The long-term benefits of increased consumer trust may outweigh some of these compliance challenges if the guidelines are implemented in a fair and effective manner, said Arora.
Edited by Jyoti Narayan