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New draft consumer protection rules for e-commerce require platforms to show country of origin of products and explain how product listings work


Under the new draft Consumer Protection (E-Commerce) Rules, 2020, e-commerce companies are required to direct sellers to display the country of origin alongside product listings. On top of that they will also have to reveal the parameters that go behind determining product listings on their platforms. The Department of Consumer Affairs published a copy of the draft rules on its website last week, but it is unclear as to when they would be published in the gazette, or if these would be opened up for public consultation. Repeated calls by MediaNama to the Consumer Affairs department went unanswered.

The department had, in November last year, released an iteration of these rules under the amended Consumer Protection Act, 2019. Comments made to those rules were not made public. The new rules are largely in line with the ones that were published in November, albeit with some differences such as requiring country of origin of products, revealing how listings on e-commerce platforms work, and appointing a nodal officer to ensure compliance. However, unlike the last iteration, these rules don’t explicitly state that e-commerce companies will have to ensure that personally identifiable information of customers is protected. The Department for Promotion of Industry and Internal Trade, under the Commerce Ministry, is also coming out with an updated national e-commerce policy.

Record info on sellers who sell counterfeit products, consent of consumers: What the new rules require

Display ‘country of origin’ of products: E-commerce entities will have to mention the name and “details” of an importer, in case the platform sells imported goods and services, per the new rules. Details about sellers on an e-commerce platform, the name of their business, whether registered or not, their geographic address, customer care number, any rating or other aggregated feedback about such seller, and any other information, will have to be “displayed prominently” to users.

  • Sellers will have to display “all relevant details about the goods and services offered for sale by the seller including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage,” the rules said.
  • Platforms will have to provide consumers information about a seller from which they have purchase a product, including the principal geographic address of the seller’s headquarters and all branches, name and details of its website, its email address and any other information necessary for communication with the seller for dispute resolution.
  • It is worth noting that Amazon India recently mandated sellers to start showing ‘country of origin’ alongside product listings starting from July 21.

Explain how listings on e-commerce platforms work: E-commerce entities will have to explain the main parameters which, individually or collectively, determine the ranking of goods or sellers on its platform and the relative importance of those main parameters through an easily and publicly available description drafted in plain and intelligible language.

  • “Every marketplace e-commerce entity shall include in its terms and conditions generally governing its relationship with sellers on its platform, a description of any differentiated treatment which it gives or might give between goods or services or sellers of the same category,” the rules said.

Record information on sellers who sell counterfeit products: Every marketplace e-commerce entity shall take “reasonable efforts” to record “relevant information” to allow for the identification of all sellers who have “repeatedly” offered goods or services, access to which was disabled under the Copyright Act, 1957, the Trade Marks Act, 1999, or the Information Technology Act, 2000.

  • The rules don’t require e-commerce platforms to terminate the access of such sellers to its platform, but they can chose to do so on a “voluntary basis”.

Consent of consumers: E-commerce entities should record a customer’s consent for the purchase of any good or service offered on its platform “where such consent is expressed through an explicit and affirmative action”. Platforms are not allowed to obtain consent from them “automatically”, including in the form of pre-ticked checkboxes.

Become a partner fo the National Consumer Helpline: Every e-commerce entity shall endeavour on a “best effort” basis to become a partner of the National Consumer Helpline of the central government.

Appoint nodal officer: E-commerce companies shall appoint a nodal person of contact or an alternate senior designated functionary located in India, to ensure compliance.

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Appoint a grievance officer for consumer grievance redressal: E-commerce companies will have o establish a grievance redressal mechanism and appoint a grievance officer for consumer grievance redressal, whose name, contact details, and designation will have to be displayed on the website.

  • Grievance officers will have to acknowledge the receipt of a consumer complaint within forty-eight hours, and redress it within one month, under the new rules.
  • E-commerce entities can’t impose cancellation charges on consumers cancelling after confirming purchase, unless similar charges are also borne by the e- commerce entity, if they cancel the purchase order unilaterally for any reason.
  • Consumers will have to be provided with a ticket number for tracking the status of a complaint.

No ‘manipulation’ of prices: E-commerce entities can not “manipulate” prices of goods and services they sell on their platforms in order to “gain unreasonable profit”.

Product description should be accurate: E-commerce entities will have to direct sellers, through an undertaking, to ensure that the descriptions, images, and other content pertaining to goods or services on their platform is “accurate”.

Inventory based e-commerce platforms, which explicitly vouch for the authenticity of the goods or services sold by them, or guarantee that such goods or services are authentic, shall bear appropriate liability in any action related to the authenticity of such good or service.

Duties of sellers

Sellers shouldn’t post fake reviews: Sellers should not adopt any unfair trade practice, and should not falsely represent themselves as customers of their own products and post misleading reviews about those.

  • It isn’t clear how this provision will be enforced since neither the rules require e-commerce companies to create a mechanism to stop such reviews, nor does it include any penalty for such sellers.

Sellers should not refuse to take back goods, or withdraw or discontinue services, if such goods and services are “defective, deficient or spurious”. Provided that in the case of late delivery, this sub-rule shall not be applied if such late delivery was due to force majeure.

Sellers should appoint grievance officer as well: Even sellers should appoint a grievance officer, and provide its legal name, principal geographic address of its headquarters and all branches, the name and details of its website, its e-mail address, customer care contact details such as fax, landline, and mobile numbers and where applicable, its GSTIN, and PAN details, to the e-commerce entity.

No misleading advertisements: Sellers will have to ensure that the advertisements of goods or services are consistent with the actual characteristics, access and usage conditions of those products.

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