E-commerce rules, 2020: Who are you? What are your duties?

The Ministry of Consumer Affairs, Food, and Public Distribution has notified the new e-commerce rules on 23.07.2020. The notification comes in exercise of the powers conferred upon the Central Government under Section 101 of the newly implemented Consumer Protection Act, 2019. So as per the new e-commerce rules, who are you? What are your duties? What are your liabilities?

“E-commerce entity”

If you are a person who own, operate or manage any electronic platform for electronic commerce, you are an e-commerce entity. (unless you involve multiple sellers on your platform)

“Inventory e-commerce entity”

You are the above said, if you own the inventory of goods or services and sells those goods or services directly to the consumers through your e-commerce platform. (including single brand retailers and multi-channel single brand retailers)

“Marketplace e-commerce entity”

You are a marketplace entity, if you provide an e-commerce platform to facilitate transactions between buyers and sellers.

What are the common duties of all e-commerce entities?

• It should be a registered company. It could also be a foreign company or an office, branch, or agency outside India- owned or controlled by a person resident in India. (foreign company would need to appoint a nodal person of contact, who is an Indian resident, for compliance with Indian laws)

• It should prominently display the following on your platform:
  • Legal name of the e-commerce entity
  • Address of the principal place of business and all branches
  • Name and details of its website
  • Contact details like e-mail address, landline, mobile number of customer care
  • Contact details of grievance officer

• It should establish a grievance redressal mechanism and display the name of the grievance officer, contact details, and his designation.

• It shall not adapt any unfair trade practice, whether in the course of business on its platform or otherwise.

• For imported goods or services, it shall mention the name and details of the importer from which you have purchased such goods or services.

How shall the grievance officer operate?

• He shall acknowledge the receipt of any consumer complaint within 48 hours.

• He shall redress the complaint within one month from the date of receipt of the complaint.

How shall the e-commerce entity lawfully operate?

• If the consumer cancels any order unilaterally for any reason after confirming purchase, it shall not impose cancellation charges on consumers, unless similar charges are also born by the e-commerce entity.

• It shall record the consent of the consumer for purchase only through express consent. It shall obtain such consent through an explicit and affirmative action (pre-ticked checkboxes). It shall not record automatic consent.

• It shall effect all payments towards accepted refund requests as per the rules of the RBI or any other competent authority, within a reasonable period of time.

• It shall not manipulate the price of goods and services having regard to prevailing market conditions. It shall also not classify or differentiate/ discriminate between consumers of the same class.

• It shall not manipulate the price of the goods or services offered in such a manner as to gain unreasonable profit by imposing on consumers any unjustified price having regard to the prevailing market conditions, the essential nature of the goods or services, any extraordinary circumstance under which the good or service is offered, and any other relevant consideration in determining whether the price charge is justified.

Additional duties of marketplace e-commerce entities as per the new e-commerce rules

• Compliance with Section 79 of the Information Technology Act, 2000 and the IT Rules (Intermediary Guidelines), 2011

• It shall require sellers to ensure that descriptions, images, and other details of goods or services on the platform is accurate through an undertaking.

• It shall provide the following information to its users on the platform:

• Pre-purchase stage- Details about the sellers offering goods and services including their business name, geographic address, customer care number, rating or aggregated feedback about such seller. It may also provide any other information which enables the consumer to make informed decisions regarding buying from a particular seller.

• Post purchase stage- If a consumer requests in writing, provide that consumer with information regarding the seller from which the consumer has purchased any goods or services. The Information shall include principal geographic address of seller’s headquarters and all branches, name and details of its website, its email address and any other information necessary for communication with the seller for effective dispute resolution.
  • It shall provide the consumer with a ticket number for each complaint, through which the consumer may track the status of the complaint.
  • It shall provide the consumer with information regarding return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, and grievance redressal mechanism.
  • It shall provide the consumer with information on available payment methods, the security of those payment methods, any fees or charges payable by users, the procedure to cancel regular payments under those methods, charge-back options, etc., and the contact information of the relevant payment service provider.

• Any e-commerce marketplace shall include terms and conditions that generally govern its relationship with sellers on its platform. It shall also provide a description regarding any differentiated treatment which it gives or might give between sellers of the same category.

• The marketplace shall maintain a record of relevant information allowing for identification of sellers who have previously been removed or access to their services have been disabled due to contravention of Copyright or Trademark law, or the Information Technology Act, 2000.

Additional duties of inventory e-commerce entities

• It shall provide the following information on the website:
  • Information related to return, refund, exchange, warranty and guarantee, delivery and shipment, cost of return shipping, mode of payments, grievance redressal mechanisms.
  • All mandatory notices and information required by applicable laws
  • Information related to available payment methods, the security of those payment methods, any fees or charges payable by users, the procedure to cancel regular payments under those methods, charge-back options, etc., and the contact information of the relevant payment service provider.
  • Total price in single figure of any good or service along with the breakup price for the good or service, showing all compulsory and voluntary charges such as delivery charges, postage and handling charges, conveyance charges and the applicable tax.
  • A ticket number of each complaint lodged by a consumer.

• It shall not post as a consumer and post review about goods and services.

• It shall ensure that advertisement of goods and services is consistent with the actual characteristics and usage conditions of such goods and services.

• It shall not refuse to take back goods, or withdraw or discontinue services purchased or agreed to be purchased, or refuse a refund if the goods or services are defective, or are not consistent with any advertisement, or if it is delivered late from the standard delivery schedule.

• If the entity explicitly or implicitly vouches for the authenticity of the goods or services sold by it, or guarantees that such goods or services are authentic, it shall bear appropriate liability in any action related to the authenticity of such good or service.

Any contravention of the new e-commerce rules would be dealt with the provisions of the Consumer Protection Act, 2019. The original rules can be read here.

Want to know about the proposed non-personal data rules? Read this intriguing article.

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