Rajya Sabha Committee recommends revision of Consumer Protection (e-Commerce) Rules, 2020

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Rajya Sabha Committee recommends revision of Consumer Protection (e-Commerce) Rules, 2020

Garima Prakash

@GarimaP

April 15, 2021

Public Policy

125

On March 24, 2021, the Rajya Sabha Committee on Subordinate Legislation presented its Report on the Consumer Protection (e-Commerce) Rules, 2020 (e-Commerce Rules). The Committee examined the e-Commerce Rules and related areas in consultation with the Ministry of Consumer Affairs, Food and Public Distribution (MoCA), Department of Consumer Affairs. The observations and recommendations of the committee include the need for certain amendments of the Rules itself or better enforcement of the existing Rules.

Summary of recommendations

Protection of personal data: Pointing to the utmost importance of privacy and data security of users, the committee recommended that:

User’s personal data may be categorized as per their level of sensitivity and appropriate protection assigned for each level. The Rules should specifically refer to the Personal Data Protection Bill, 2019 for data protection related rights and obligations.
MoCA should ensure availability of a secured and robust system of payment gateway to prevent any compromise in transaction related data of users.

Certain other recommendations have been made specifically for ‘major e-marketplace entities’:

Establishment of data centre in India, to prevent misuse of consumer data by other countries.
Innovating new economic models that promote establishment of global hyperscale data centres in India.

Unfair Trade Practices/ Monopolies: Acknowledging that companies are indulging in unfair trade practices such as predatory pricing, the Committee recommended:

The inclusion of a clear-cut definition of what constitutes unfair trade practice, and of legal remedies to tackle circumventing practices by e-commerce entities.
The inclusion of appropriate mechanisms under the e-Commerce Rules to prevent local vendors/ 'kirana’ shops from being adversely impacted.
Devising ways to encourage small vendors to become a part of the e-commerce ecosystem.

Manipulation of Algorithm, Fake reviews, and other malpractices: Acknowledging cases of fake reviews, unfair favouritism of sellers and drip-pricing, the Committee pointed to the lack of clearly defined enforcement mechanisms of related provisions under the e-Commerce Rules and recommended:

The creation of a corrective mechanism to discourage deceptive tactics such as manipulation of algorithms, fake product reviews and ratings
The MoCA to provide a definition for Drip-pricing in the e-Commerce Rules and include penal provisions for non-compliance.

Grievance Redressal & Consumer Helplines: Pointing to the incompleteness of grievance redressal related provisions in the Rules, the Committee recommended that:

Duties and responsibilities of e-Commerce entities in relation to customer care service provided by the marketplace entity should be clearly spelt out in the e-Commerce Rules.
Levels of escalation of grievance in case of non-redressal should be mentioned in the e-Commerce Rules.
Entities should be directed to create a mechanism to monitor and maintain a record of the time taken by the customer care executives to resolve an issue. This record may be presented by the entities when asked for.

Regulation of Delivery Charges: Pointing to the lack of mechanism to monitor the delivery charges, the Committee recommended that:

MoCA should issue broad guidelines for the fixation of delivery charges charged by the marketplace entities, including a cap on the delivery charges in peak hours of service.

Product Information and related Issues: Focusing on the prevention of internet-based fraud to user who may not have adequate digital education, the Committee recommended that:

The e-Commerce Rules should distinguish the cases of misinformation, no information and the information which is otherwise correct but creates a false impression and provide for penal provision for each case.
Mechanism of grievance redressal in cases of misleading product information or non-delivery of product as promised in the seller-contract should be either laid down in the Rules or published through supplementary guidelines.

The full report can be found here. We are reviewing the implications of the recommendations made in this report ad will accordingly engage with the government to represent the interests of the e-commerce industry. Kindly write to garima@nasscom.in to share your comments and suggestions.

e-commerce consumer protection parliamentary committee

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Garima Prakash

Manager, Public Policy and Government Affairs

Reach out to me for all things policy about e-commerce, international trade, export controls, start-ups and fintech