Changes in Rules for E-commerce Entities

Government Notifies New Rules for E-commerce Entities for Betterment

The Indian government authorities have recently notified new rules for e-commerce entities. This includes the mandatory display of ‘country of origin’ on their products.  It has also been said that any non-compliance will attract penal action.

The new ‘Consumer Protection (E-Commerce) Rules, 2020’ were notified and brought to light on Thursday. These new rules will be applicable to all kinds of electronic retailers offering goods and services to Indian consumers registered in India or abroad.

Any kind of violation of the rules will attract penal action underneath the Consumer Protection Act, 2019.

Changes in Rules for E-commerce Entities

As per the new rules, the e-commerce players will be required to display the total price of goods and services offered for sale. Along with this, it will need to show a break-up of other charges.

Other requirements include mentioning the ‘expiry date’ of goods up for sale along with the ‘country of origin’ of its goods and services.  This act has been termed necessary for enabling the consumer to make an informed decision during the pre-purchase stage.

E-commerce players will have to display details like a refund, exchange, warranty return, and guarantee, delivery, and shipment. Along with his E-commerce players are encouraged to add any necessary kind of other information that may be required by consumers to make informed decisions.

Sellers that tend to offer goods and services through a marketplace e-commerce entity will be required to provide the above details to the e-commerce entity to be displayed on its platform or website.

As per the new rules that have been introduced e-commerce entities should not impose “cancellation charges” on consumers canceling orders after confirmation. The only exception that can be expected to be made can be when sellers are ready to pay similar charges in case the cancellation of orders are from their side.

E-commerce entities are not allowed to “manipulate the price” of the goods and services offered on their platforms in order to gain unreasonable profit. Other than this they are expected to not discriminate between consumers of the same class or make any arbitrary classification of consumers affecting their rights under the Act.

E-commerce entities will have to provide information on available payment methods and also the security of those payment methods. Detailed information regarding any fees or charges payable by users, and the contact information, among other details, should be considered as of the relevant payment service provider.

E-commerce entities are supposed to display prominently to its users details about the ‘sellers’ offering goods and services. This includes the name of their business, whether registered or not. Sellers’ geographic address, customer care number, and any rating or other aggregated feedback about such seller, among others, must be shown over the website as per the new rules.

A new system of providing a ticket number for each complaint lodged should be started. Through this, the consumer can track the status of the complaint.

In order to prevent fraud, the new rules do not permit any inventory e-commerce entity to “falsely represent itself as a consumer. This includes posting reviews about goods and services or misrepresent the quality or the features of any goods and services”.

Inventory e-commerce entities will now also have to ensure that the advertisements for the marketing of goods and services are consistent. This is to be done with the actual characteristics, access and usage conditions of such goods or services.

Under these new given rules, no inventory e-commerce entity will now be allowed to refuse to take back goods. This includes entity withdrawing or discontinuing services purchased or agreed to be purchased, among others, subject to various conditions.

On July 20, 2020, Consumer Affairs Secretary, Leena Nandan says,

“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.”

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