The central government has notified the Consumer Protection (E-Commerce) Rules, 2020 on 24th July 2020 vide notification-bearing no. G.S.R. 462(E). These new rules complement the consumer protection Act, 2019 concerning the protection of the consumers from unfair trade practices, predatory pricing and providing misleading information on portals.
The Consumer Protection Act, 2019, which has come into effect from July 2020, did bring e-commerce entities under its preview to protect the consumer not only from the traditional platforms but also from the e-commerce model.
The following features of the new notified rule are as follows:
Definition of e-commerce entity: It 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; An e-commerce entity shall be an incorporated company and the Ministry of Consumer Affairs shall regulate the companies. The e-commerce an entity shall appoint a nodal person to ensure compliances related to consumer affairs
Transparency and obligations- Sellers will need to disclose details of their e-commerce entities on their portals clearly and transparently, including their legal names, main addresses, contact details, website names, and products sold and so on. E-commerce entities will need to display the terms of their return, refund and exchange policies, warranty and guarantee policies, shipment and delivery terms, payment terms, grievance redress mechanisms, and so on. Besides, e-commerce entities must ensure that they do not display false or misleading advertising regarding product characteristics, and that they set out other relevant details including health and safety information, the security of payment methods, the shelf life of products, and the breakdown of prices showing all included charges. They will need to protect, use and store personal identification information of its consumers in compliance with the law. E-commerce entities will need to unconditionally accept the return of goods that are delivered late or are defective, a term that includes counterfeit and wrongly advertised products, and provide refunds within 14 days.
Unfair contracts- The concept of unfair contracts under the act enables consumers to file complaints and challenge contracts that are unfair or arbitrary. E-commerce websites depend on contractual terms to mitigate risk exposure and safeguard their interests against third-party liabilities. These terms and conditions are generally in the form of a clickwrap agreement and become binding on consumers at the time they register on the platform or purchase goods or services. These standard terms and conditions are now required to satisfy the provisions of the rules.
Redress procedures- The rules oblige e-commerce entities to appoint grievance officers and to publish their contact details while explaining the procedure through which consumers can make complaints. The draft rules require grievance officers to resolve the complaint within one month from the date of receipt of the complaint. The rules also identify other means by which complaints can be filed such as phone, email, or website.
Caveat vendor -The rules, read with the act, mark a shift from the principle of caveat emptor (let the buyer beware) to caveat vendor (let the seller beware). The draft rules seek to protect consumers from misinformation and misrepresentation on e-commerce platforms, to address issues of consumer rights, unfair trade practices and misleading advertisements. They impose penalties for faulty and fake products by ensuring that the entities and sellers will be subject to clear legal standards.
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