Context: Recently, the Department of Consumer Affairs, Government of India has sought suggestions on proposed amendments the Consumer Protection (E-Commerce) Rules, 2020.
Need for changes in E-commerce rules

• It is required to curb e-commerce entities’ dominant position in the market.
• There was increased incidence of the ban on misleading users by manipulating search results.
• The government also seeks to ban ‘flash sales’ on e-commerce platforms if such sales are organised by fraudulently intercepting the ordinary course of business using technological means.
• It is required to purify e-commerce landscape of the country which has been greatly vitiated by various e-commerce global companies.

Proposed amendments to Consumer Protection (E-commerce) Rules, 2020

• It proposed that every e-commerce entity which intends to operate in India must register itself with the Department for Promotion of Industry and Internal Trade (DPIIT).
• The new draft proposed the appointment of chief compliance officer and resident grievance officer.
• The e-commerce entities are also required to provide information not later than 72 hours of the receipt of an order from a government agency for prevention, detection and investigation and prosecution of offences under any law.
• The government has proposed a ban on ‘mis-selling’ of goods and services offered on such platforms.
• The proposed amendment defines ‘flash sale’ as that organised by an e-commerce entity at significantly reduced prices, high discounts or any other such promotional offers for a predetermined period of time.
• The e-commerce entities should ensure that such registration number and invoice of orders are displayed prominently to their users in a clear and accessible manner on their platform.
• The E-commerce entities offering imported goods/services will also have to mention the name and details of the importers and the country of origin.

Present position of e-commerce entities in India

• The e-commerce entities are registered under the Companies Act, Indian Partnership Act or Limited Liability Partnership Act and not separately with DPIIT.
• An e-commerce entity means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity.

Conclusion

• The proposal comes at a time when large e-commerce marketplaces are being investigated by the Competition Commission of India (CCI) for alleged abuse of market dominance and giving preferential treatment to sellers in which they hold indirect stakes.