Consumer Protection (e-Commerce) Rules, 2020

Background

Ministry of Consumers Affairs, Food and Public Distribution (“Ministry”) on 23rd July 2020 notified the Consumer Protection (E-Commerce) Rules, 2020 (“Rules, 2020”) for e-commerce entities including marketplace and inventory based e-commerce entities in which retailers directly sell services or goods to the consumers. Earlier, vide notification dated 15th July 2020 issued by the Ministry; the Consumer Protection Act 1986 was superseded by the Consumer Protection Act 2019 (“Act, 2019”).

Key features of the Rules, 2020.

The Rules, 2020 have been designed to ensure more transparency and accountability on the part of the online retailers towards consumers .The Rules, 2020 apply not only to the e-commerce entity which is based in India, but also the e-commerce entities established outside India which offers goods and services to consumers in India, such e-commerce entity is required to appoint officer resident in India to ensure compliance with the provisions of the Act, 2019 and Rules, 2020. Violation of any of the provisions of the Rules, 2020 will attract penal action under the Act, 2019. Some of the key features of the Rules, 2020 are:-

1.      Details of the sellers offering the goods and services, including the name of their business, geographical location, customer care number, etc. are required to be displayed on the e-commerce entities platform to help the consumers make informed decisions and reduce the fraud on e-commerce space.

2.      To make sure that the consumer, before purchasing goods and services from online retailers are well informed about and agree with the terms and conditions, the consent of the consumer for the purchase of the goods and services offered by the e-commerce entities is required to be recorded by such entities, however, the consent cannot be taken automatically or by pre-ticked boxes.

3.      The sellers on the e-commerce space are required to adhere to rules such as displaying total price of the goods or services made available along with the breakup of the total price, displaying expiry date of the goods and services offered etc.

4.      In order to promote the ‘Make in India’ and ‘Atmanibhar Bharat’ initiatives of Government of India, the Rules, 2020 provide that if imported goods or services are offered by the e-commerce entities, the origin of such goods or services are required to be mandatorily displayed on its platform.

5.      E-commerce entities cannot manipulate the prices of goods or services offered to gain unreasonable profits and are also prohibited from discriminating between the consumers of the same class or from any arbitrary classification of the consumers.

6.      Online retailers shall also display the information regarding return, refund, exchange, warranty, guarantee, delivery and shipment, mode of payment, etc. on their platforms for more transparency.

7.      Information of available payment methods and security available are also to be provided on the e-commerce platform to so that the consumers can choose payment option as per their preference.

8.      Cancellation charges cannot be imposed by the e-commerce entities unless similar charges have been borne by such entities after confirmation of the purchase. This will ensure that the e-retailers do not make unfair gains from the buyers.

9.      To provide for speedy redressal of the consumer complaints and easily accessible mechanism for such purpose, every electronic retailer is required to set up grievance redressal mechanism consisting of a grievance officer who shall redress the complaint of the consumers within one month of the receipt of the complaint. The e-commerce entities are also required to provide ticket for each complaint lodged so that the consumers can track their complaints.

The Rules, 2020 have been framed keeping in mind the overall e-commerce police and are set to regulate e-commerce entities more stringently .  

News flash dated 30.07.2020

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