E-Commerce Guidelines for Consumer Protection 2019

Why in news?

The Consumer Affairs Ministry recently released the E-Commerce Guidelines for Consumer Protection 2019.

What necessitated this?

India’s e-commerce sector is poised to grow four times to $150 billion by 2022.
However, it is still a work in progress when it comes to safeguarding customer interest.
Consumers are still compelled to take wild chances in online transactions.
There is little they can do if their calls go wrong, as returns and reimbursements are risky and cumbersome.
There are no authentic ways to figure out if product reviews, ratings or even discounts are genuine.
Given these, a set of guidelines to protect the interests of consumers was a much called-for one.

What are the key guidelines?

An e-commerce entity shall not influence the price of the goods or services.
It should not adopt any unfair or deceptive methods to influence transactional decisions of consumers.
Entities are also not to falsely represent themselves as consumers and post reviews about goods and services.
The guidelines on returns and refunds are designed to favour consumers.
Marketplace entities (e-commerce platforms) will not be able to buy more than 25% from a single vendor.
They can also not give discounts on products or sell the goods of the companies in which there is equity participation by the marketplace entity.

What are the challenges?

Clearly, the Ministry’s thinking seems to be in line with the Centre’s approach to regulating the fast-growing e-commerce sector.
However, it is challenging to balance between regulating consumer interests and encouraging innovation and investment, without discriminating against a particular class of investors.
The DPIIT (Department of Promotion of Industry and Internal Trade) is also framing an e-commerce policy and has put up the draft for comments.

retaining ownership and control of data generated within the country (data localisation)
rigorous monitoring of cross-border imports
placing the responsibility of consumer protection on the intermediary
addressing the issue of piracy

In this context, the element of indecision over data localisation requirement is still a worry.
Both the DPIIT and MeitY (Ministry of Electronics and Information Technology) are attempting to make a case for data localisation in the e-commerce policy and the data protection policy, respectively.
The RBI is also pursuing this in the case of payment systems.
These attempts have predictably resulted in a lot of protests from the EU and US entities.

Besides, the new guidelines had raised concerns among foreign e-tailers.
They feel that the rules would jeopardise their business models and could cost them time and money.

Given all these, the Centre should take a call soon on the e-commerce policy, balancing the priorities of the stakeholders.

Source: Business Line