A BRIEF ANALYSIS ON CONSUMER PROTECTION (E-COMMERCE) RULES, 2020

A BRIEF ANALYSIS ON CONSUMER PROTECTION (E-COMMERCE) RULES, 2020

The objective of this rule is to regulate the e-commerce sector in India and to protect consumers from any unfair trade practices.


The E-commerce industry is in the booming stage and provides everything starting from needle to car etc. online and anyone can buy and sell on these platforms. By just a click, anything that you desire for comes at your door. 
 

As per the definition, an e-commerce entity means anyone who owns, runs or manages electronic or digital facility or platform for electronic commerce, excluding a seller offering his goods or services for sale on a market place e-commerce entity.

Today, so many e-commerce industries exist and are earning huge by just meeting the demands of the customers. This industry has started a very unique concept of business and as per the situation and demand, they change their style of selling by bringing new methods such in the name of bumper sale, mega sale, exchange offers, etc.
 


 

As so many people are entering this industry, so survival became a big question for them and they are finding it tough too. So, to eliminate the competition and to survive and also to meet the demand of the customers, companies may start using the course of unfair trade practices, which in turn can harm the customers.
 

So, in order to control such practices, on 23rd July 2020, the Ministry of Consumer Affairs, Food, and Public Distribution has notified the Consumer Protection (E-Commerce) Rules, 2020. The objective of this rule is to regulate the e-commerce sector in India and to protect consumers from any unfair trade practices by them. 
 

Important highlights of the Consumer Protection (E-Commerce) Rules, 2020
 

Applicability: This rule is applicable to the following –

  1. Any type of goods and services that are bought or sold over the digital or electronic network which also includes digital products;
     
  2. all models of e-commerce which includes marketplace and inventory models of e-commerce;
     
  3. all e-commerce retail, including multi-channel single-brand retailers and single-brand retailers in single or multiple formats;
     
  4. Any forms of unfair trade practices across all models of e-commerce;
     
  5. An E-Commerce entity not incorporated in India but offers goods and services to consumers in India.
     

Non-Applicability: This rule will not apply to any activity that is carried out in a personal capacity by a natural person who do not belongs to any professional or commercial activity undertaken on a daily basis.
 

Duties of e-commerce entities: 

1.  An e-commerce entity will be: 

  • The company as incorporated under the Companies Act, 1956 (1 of 1956) or 
  • The company as incorporated under the Companies Act, 2013 (18 of 2013) or 
  • a foreign company as covered under clause (42) of section 2 of the Companies Act, 2013 (18 of 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 (42 of 1999); 
     

2.  It is important for all the e-commerce entity to appoint a nodal person of contact or a senior designated official who is resident in India in order to look into the compliances of the Consumer Protection Act and E-Commerce Rules as applicable. 

3.  Every e-commerce entities are required to mention the following information clearly on its platform which can be easily visible to the consumers:

  1. the legal name of the e-commerce entity
  2. principal geographic address of its headquarters and all branches
  3. name and details of its website
  4. contact details like e-mail address, fax, landline and mobile numbers of customer care as well as of grievance officer
     

4.  No e-commerce entity whether in the course of business or otherwise shall adopt any unfair trade practice.

5.  Every E-commerce entity is required to establish a grievance redressal mechanism. They should appoint a grievance officer for addressing the consumer’s grievance and also display the name, contact details, and designation of such an officer on its website. It is the duty of the grievance officer to acknowledge the receipt of consumer complaints within 48 hours and within 1 month from the date of receipt of the complaint address the consumer’s complaint. 

6.  In case of offering any imported goods and services to the consumers, it is the duty of an E-commerce entity to mention the name and details of the importer and also the country of origin should also be specified on E-commerce websites. 

7.  Cancellation charges will not be imposed on consumers by the e-commerce entity.

8.  An e-commerce entity will not record the consent of the consumer to purchase any good or service automatically. They can only record the consent if expressed through an explicit and affirmative action.

9.  In order to gain unreasonable profit from the consumers, the e-commerce entity will not manipulate the price of goods and services. 
 

Liabilities of marketplace E-commerce entities

There are certain terms and conditions which must be fulfilled by the marketplace e-commerce entities and they are as follows:

1.  It is the duty of the market place E-commerce entities to ensure that descriptions, images, and other relevant content related to goods or services on their platform are precise and relate directly with the form,  nature, quality, and other general features of such good or service.

2.  Every marketplace entity has to ensure that they provide the necessary information on their platform in a clear and specified way so that the customers before making any purchase can take a apt decision by going through the important information regarding the goods. The necessary information are as follows:

  • specific information about the sellers offering goods and services, which includes the name of their business, whether it is registered or not, their geographic address, customer care number, any rating or other aggregated feedback about such seller
     
  • a ticket number for each complaint so that the consumer can track the status of the complaint
     
  • Necessary information such as return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, and grievance redressal mechanism
     
  • Method or mode of payment
     
  • A detailed description that explains the ranking of the goods in an easy and logical manner.
     

3.  Every market place entity are required to include in its terms and conditions relating to different treatment description which it gives or might give to goods or services or sellers of the same category.
 

Duties of sellers on the marketplace

1.  No seller will falsely represent itself as a consumer.

2.  They cannot post fake reviews about the goods and services or about the features or qualities of those goods and services.

3.  The sellers cannot refuse the following-

  • to take back goods, or withdraw or discontinue services purchased or agreed to be purchased, 
     
  • refuse to refund in case the goods or services provided by the seller are defective or does not match with the qualities or features as mentioned by the seller on the website 
     
  • In case the goods are delivered later than the expected delivery date.
     

4.  The sellers are required to appoint a grievance officer in order to address the grievances as lodged by the consumers.

5.  To provide true and fair information related to refund, return exchange, warranty or guarantee, etc.

6.  To provide the way of payment.

7.  To provide the correct price, quantity, features of the products
 

Duties and liabilities of inventory e-commerce entities

It is the responsibility of the entire inventory E-commerce entity to provide the following information-

  1. Correct and precise information related to return, refund, exchange, warranty and guarantee, delivery and shipment, cost of return shipping, 
  2. mode of payments
  3. to appoint an officer in order to address the grievances of the consumers
  4. all-important notices and information required by applicable laws, 
  5. To display total price in the single figure along with the break-up price of goods or services
  6. For each complaint, they are required to provide a ticket number through which the consumer can track the status of the complaint.
  7. The inventory e-commerce entity has to bear all the appropriate liability if they vouch for the authenticity of goods or services sold by them.
  8. They cannot refuse to take back any goods or services sold by them if found defective by the consumers
  9. They cannot refuse to refund the amount if goods are found defective, does not match with the qualities or features as mentioned by the seller on the website or if the goods are delivered later than the expected delivery date.
  10. They cannot misrepresent themselves as consumers and cannot give fake reviews of the goods or services as sold by them.
     
Contravention of rules

In case of any violation or non-compliance against this rule, the provisions of the Consumer Protection Act, 2019 (35 of 2019) shall be applicable on it.
 

Conclusion

This rule if implemented and executed properly, consumers will be saved from any unfair trade practices as conducted by such e-commerce entities.

For any query, kindly click on the following link –

https://consumeraffairs.nic.in/sites/default/files/E%20commerce%20rules.pdf
 

Edited by Minu Mishra

Want to get your business journey featured on CLIQTAX ? Send an email to us at editor@cliqtax.com