The Ministry of Consumer Affairs on Monday proposed amendments that give the existing Consumer Protection (E-Commerce) Rules, 2020 more teeth. The proposed changes include new rules to address abuse of FDI regulations, the establishment of a grievance redressal mechanism, new display and labelling criteria for foreign goods, the prohibition of flash sales, data protection for customers, among other things. These changes come in response to "several representations from aggrieved consumers, traders and associations complaining against widespread cheating and unfair trade practices being observed in the e-commerce ecosystem," the government stated in a press release. MediaNama has reached out to Flipkart and Amazon for comments and is awaiting a response. Read: Summary of the current E-Commerce Rules, 2020 Changes to address abuse of FDI regulations The Indian government’s Foreign Direct Investment (FDI) policy outlines that e-commerce companies with FDI like Amazon and Walmart-owned Flipkart can only operate as marketplaces for third-party sellers and cannot operate an inventory-based model where they sell directly to customers. But brick-and-mortar retailers have accused Amazon and Flipkart of getting around this by setting up complex ownership structures and giving preference to a select group of sellers that are indirectly owned or controlled by them. Reuters in February reported that thirty-five sellers, Cloudtail one of them, accounted for two-thirds of Amazon’s sales in India. The agency’s reporting revealed how Amazon used legal manoeuvres to sidestep Indian regulations aimed at curbing deep discounting and limiting Foreign Direct Investment. The draft rules aim to address these issues by proposing the following: Related…
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