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Govt issues notice to Amazon, Flipkart for not displaying country of origin of products

The Consumer Affairs Ministry on Friday sent notices to Amazon and Flipkart asking them to explain — within fifteen days — why action shouldn’t be taken against them for not displaying the country of origin in some product listings. In July, the Ministry had notified e-commerce rules for consumer protection, which mandate platforms like Amazon and Flipkart to display the country of origin alongside the products they offer, among other things. Mint first reported this, and a copy of the notices was shared with MediaNama by Praveen Khandelwal, national general secretary of the traders’ lobby Confederation of All India Traders.

Watch: Rahul Narayan, a Supreme Court Advocate, explains the feasibility of displaying country of origin of products available on e-commerce platforms: 

As part of their responses, Amazon and Flipkart will also have to furnish the following details, among other things, within fifteen days:

  • The names, residential addresses of people “responsible for the conduct of the business” as well as all the owners, partners, or directors, including the police station jurisdiction under which they reside
  • Details of offences framed under the Legal Metrology (Packaged Commodities) Rules, 2011 (which require e-tailers to display country of origin of product listings), against the company in the last three years
  • Nature of the ownership of the firm
  • A copy of registration certificate of the GST, or a partnership deed, depending on the type of company.

If the companies fail to respond within fifteen days, the Ministry said, it will initiate actions against the two for contravening the Legal Metrology Act, and the e-commerce consumer protection rules.  As per the Legal Metrology (Packaged Commodities) Rules, 2011, first offences result in a fine of upto ₹25,000, and subsequent violations will result in a penalty of ₹50,000 and/or jail.

In the notices, the Ministry highlighted specific product listings on Amazon and Flipkart. While the links mentioned in the notices seem to be broken, from the URL, it appears that on Flipkart, the Ministry flagged two products — a powerbank made by Smartbuy, and a laptop made by Acer. On Amazon, the Ministry flagged one link — a sweatshirt made by US Polo.

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What are the rules that mandate e-tailers to display country of origin of products?

In July, the Consumer Affairs Ministry notified the Consumer Protection (E-Commerce) Rules, 2020 which direct e-commerce companies 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. While the requirement to display country of origin was already a necessity under the Legal Metrology (Packaged Commodities) Rules, 2011, the enforcement of these rules coincided with the ban of several Chinese-owned apps, followed by skirmishes between India and China at the border.

Following that, the government had also told the Delhi High Court that it is mandatory for e-commerce platforms such as Amazon, Flipkart, and Snapdeal to display the country of origin alongside imported products. This response had come in a counter-affidavit filed by the centre, following a plea seeking e-commerce to display country of origin alongside product listings.

The benefits of this rule, and what to be cautious about

Rahul Narayan, who is an Advocate-on-record at the Supreme Court, had, in an op-ed published on MediaNama in August, written that there are many reasons to mandate displaying the country of origin, arguing that it would check abuse of Free Trade Agreements, and aid aid consumer choice, among other things. However, he had also cautioned against implementing the directive hastily and harshly, saying that “a best efforts standard or a due diligence standard should be deemed to be sufficient compliance with the mandate”.

He had also suggested that the government define clearly how the country of origin is to be determined, doesn’t impose the rule on every single product listing on the platforms, apply the same rules to brick and mortar retailers, and offer the platforms enough time to comply with the mandate.

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