Consumer Protection in E- Commerce Rules 2020

Consumer Protection in E- Commerce Rules 2020

Executive Summary:

• • • This Article contains the information about the aspect of Consumer protection when purchasing goods through online platforms.
    • In India, the Consumer Protection (E-Commerce) Rules, 2020 (“Rules”) framed under the Consumer Protection Act, 2019 (“Act”), to make provisions with respect to online shopping with the intent of preventing unfair trade practices in e-commerce and protecting consumers’ interests and rights.

Introduction:

According to a survey by the Internet and Mobile Association of India, India’s e-commerce sector is worth USD 20 billion. E-commerce has had a significant influence on various Indian businesses, like tourism industry, telecommunications sector, internet trade industry, and so on. The government has heavily pushed e-commerce, which is actually a promotion of e-consumer activities, with a particular concentration on service delivery. Legal control, on the other hand, has yet to catch up with supply.

Electronic commerce, often known as e-commerce, is the exchange of goods and services through the internet. There are 3 types of Ecommerce Businesses:

• B2B (Business to Business)
• B2C (Business to Consumer)
• C2C (Consumer to Consumer)

The idea and execution of e-commerce came to the fore in 1999, when the Organisation for Economic Co-operation and Development (OECD) organization established the first International Instrument for Consumer Protection in the framework of economic cooperation and development. Following an initial assessment of company rules, recommendations were made on how the concept of e-commerce should be adopted.
On July 23, 2020, the Ministry of Consumer Affairs, Food and Public Distribution notified the Consumer Protection (E-Commerce) Rules, 2020 (“Rules”) under the Consumer Protection Act, 2019 (“Act”), with the intent of preventing unfair trade practices in e-commerce and protecting consumers’ interests and rights.

Applicability and Scope of the Rules-

The Consumer Protection (E-Commerce) Rules, 2020 are designed to be applicable to:

• (i) All products and services bought or sold through digital or electronic networks,
• (ii) All e-commerce models, and
• (iii) All e-commerce retail formats, with the exception of natural people trading in their personal capacity (which is not part of any professional or commercial activity undertaken on a regular or systematic basis)

The Rules apply to e-commerce businesses (“Platforms”) that own, operate, or administer a digital or electronic facility or electronic commerce platform, as well as vendors of items and services.More crucially, the Rules have been made clearly applicable to digital products and e-commerce firms that, although not being incorporated in India, “systematically” sell goods or services to Indian customers.
The Rules’ also apply to organizations that provide entirely digital services, such as over-the-top content provider platforms, ed-tech offerings, cab hailing/sharing companies, event management/ticket vending platforms, telemarketing channels, and so on.

Consumer Protection (E-Commerce) Rules, 2020-

These Rules prescribe a set of general conditions that platforms have to adhere to. Some of the key ones are as follows:

1) Compliance Officer-

To guarantee compliance with the Act and the Rules, platforms must designate a nodal officer or a substitute senior functionary who is an Indian resident. There are no requirements for such an officer’s qualifications, duties, or liabilities.

2) Consumer Grievances-

The Rules include a number of criteria for customer grievance resolution, such as establishing a time-bound grievance redressal procedure, designating a grievance officer, and establishing a framework for customers to monitor their complaints.

3) Information Disclosure-

• Platforms must publish a considerable quantity of information in a clear and accessible manner in order to comply with the Rules.
• The terms and conditions regulating Marketplace Platforms’ interactions with sellers, as well as a description of any differential treatment of products and services or sellers in the same category, must be included as part of the information provided.
• A marketplace Platform is needed to aid customers in the event of a disagreement by providing them with information about the relevant vendor, which is important for efficient dispute resolution.

4) Pricing, Purchase, Refunds and Cancellation-

• The Rules specify criteria for determining whether pricing is unjustified, such as current market conditions, nature of goods or services, and extraordinary circumstances.
• No cancellation fees are allowed unless the Platform Company pays equivalent fees for cancellation.
• There is a restriction on refusing to accept a return or refund in the case of defective/deficient/spurious goods/services, late deliveries (excluding delays due to force majeure), and giving fraudulent customer reviews in the case of inventory-based Platforms.
• If an inventory-based Platform expressly or implicitly vouches for the authenticity of the goods/services it sells, or promises that they are real, it will be held liable for any action connected to the authenticity of such goods/services.

5) Steps to prevent violation of IPR-

Platforms must also make reasonable steps to keep track of vendors who have sold products or services in violation of trademarks, copyright, or the Information Technology Act on several occasions. Platforms must also acquire guarantees from sellers that the descriptions, pictures, and other material associated with products or services are accurate.

Obligation of Sellers on Platforms

1) The Rules require sellers to refrain from misrepresenting themselves as consumers, posting reviews about goods or services, or misrepresenting their quality, as well as to disclose back-to-back information, such as pricing, mandatory notices and expiry dates, country of origin, details of goods and services, exchange, returns, and refunds.
2) Platforms’ responsibilities in terms of appointing grievance officers, bans, and limits on returns and misleading advertising also apply to vendors. The above-mentioned considerations on these problems would also apply to vendors.
3) While big institutional sellers may still be able to implement these criteria, small sellers may find them burdensome.

Penalty for Contravention of Rules

The Consumer Protection Act, 2019 shall be applicable for any violation of the provisions of these rules.Section 94 of the Consumer Protection Act of 2019 discusses measures to prohibit unfair commercial practices in e-commerce, direct selling, and other similar situations. It states that the Central Government may take such measures in the prescribed manner to prevent unfair trade practices in e-commerce, direct selling, and so on, as well as to protect the interests and rights of consumers.

Conclusion

This article enlists detailed information about The Consumer Protection (E commerce) rules 2020 which every person who is shopping online needs to know.It is important to govern E commerce with proper consumer protection laws. So that the customers will not be taken advantage of by the internet platforms that offer their items.The e-commerce sector is expected to keep growing in future. Better enforcement policy as well as Rules and Regulations pertaining to e-commerce sector will contribute significantly to growth of this sector in long run.

Regards,
Legal Team

Proind Business Solutions Private Limited
306, Tower B, I-thum, Plot No A-40, Sector 62, Noida, UP, India- 201301
No.: +91 120 4224203
Email: info@proind.in, website: www.proind.in