India's Ministry of Consumer Affairs is considering a provision to subject e-commerce firms to "fallback liability", according to a report in the Economic Times. Once passed, the provision is likely to make these companies liable for fraud perpetrated by sellers, the report added. The Ministry of Electronics and Information Technology (MeitY) has sent a notice to e-commerce platforms asking them to elaborate on their role as an intermediary. The rules will be drafted only after the Ministry receives a response from these platforms, the business daily said. “We are in the process of restructuring the ecommerce rules to ensure consumer interests are protected adequately in this emerging digital economy,” an official from the consumer affairs ministry was quoted as saying. It must be noted that e-commerce platforms are insulated from liability as intermediaries under Section 79 of the Information Technology Act, 2000 currently. It is this provision which is set to change if the government has its way. Why it matters: It is a significant development as it strikes directly at the heart of the safe harbour provision that e-commerce companies have come to enjoy ever since they came into existence. However, it may not be surprising given what the Minister of State for Information Technology Rajeev Chandrsekhar said at a recent consultation on the Digital India Act, 2023. The lack of regulatory clarity on how to ascertain a platform’s liability has led to a vacuum in addressing consumer grievances. The platforms, on the other hand, argue that they cannot…
