On 10 January 2020, NASSCOM met the Joint Secretary, Department of Consumer Affairs (DoCA), to discuss NASSCOM’s submission on the draft Consumer Protection (e-Commerce) Rules (draft E-commerce Rules) proposed to be notified under the Consumer Protection Act, 2019 (COPRA19). NASSCOM’s submission focused on greater definitional clarity, rationalising of obligations in line with activities undertaken by the relevant entity in the e-commerce supply chain, and ensuring faster and efficient redressal while addressing key business risks faced by e-commerce marketplaces such as a disintermediation risk. 

The DoCA published the Consumer Protection (E-commerce) Rules, 2020 (E-commerce Rules) on 17 July 2020. In welcome news for the industry, the E-commerce Rules substantially reflect all NASSCOM recommendations, except the following: 

 Definition of ‘e-commerce entity’: NASSCOM had recommended that the definition of ‘e-commerce entity’ be modified to refer to the definitions used in the COPRA19 and the draft E-Commerce Rules. Accordingly, NASSCOM had proposed the following definition: 

“E-Commerce entity” means a product seller conducting e-Commerce business whether through inventory based model of e-Commerce, or market place based model of e-Commerce, or both. 

Provided that “E-Commerce Entity” does not include any entity or business notified otherwise by the Government for the said purpose from time to time. 

The E-commerce Rules use the following definition of ‘e-commerce entity’: 

“e-commerce entitymeans 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”. 

The proviso to E-commerce Rule 2(1) (Scope & Applicability) makes the definition narrower in scope: 

  1. Scope and Applicability. – (1) Save as otherwise expressly provided by the Central Government by notification, these rules shall apply to:

(a) all goods and services bought or sold over digital or electronic network including digital products; 

(b) all models of e-commerce, including marketplace and inventory models of e-commerce; 

(c) all e-commerce retail, including multi-channel single brand retailers and single brand retailers in single or multiple formats; and 

(d) all forms of unfair trade practices across all models of e-commerce: 

Provided that these rules shall not apply to any activity of a natural person carried out in a personal capacity not being part of any professional or commercial activity undertaken on a regular or systematic basis. 

A detailed analysis of NASSCOM’s submission vis-à-vis the E-commerce Rules is posted below. 

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