Introduction
The Ministry of Consumer Affairs, Food and Public
Distribution (Ministry) vide its notification no. GSR
462(E) dated 15 July 2020 (Notification) has notified
certain provisions of the Consumer Protection Act, 2019 (CPA
2019) replacing the Consumer Protection Act, 1986. Pursuant
to the power conferred under the CPA 2019, the Ministry has
notified the Consumer Protection (E- commerce) Rules, 2020 (E-commerce
Rules) on 23 July 2020.
The E-commerce Rules aim to prevent unfair trade practices and
protect the rights of consumers in an online setup.
Scope
and applicability
The
E-commerce Rules apply to the following:
-
(i) all goods and services (including digital products) bought
or sold over any digital/ electronic platform – this may
include all forms of online services such as cab hailing,
ticketing and video/ audio streaming;
(ii) all models of e-commerce including marketplace and
inventory based models;
(iii) all e-commerce retail, including multi- channel single
brand retailers and single brand retailers in single or
multiple formats;
(iv) all forms of unfair trade practices across all models of
e-commerc.
(v) all e-commerce entities (not established in India) but
systemically offering goods or services to consumers in India.
The
The E-commerce Rules do not apply to any activity of a natural
person carried out in its personal capacity, not being part of any
professional or commercial activity undertaken on a regular/
systemic basis.
Important
definitions
-
(i) E-commerce entity means any person who owns,
operates or manages digital/ electronic facility or a platform
for electronic commerce. It does not include a seller offering
goods or services for sale on a marketplace e-commerce entity.
The e- commerce entity is required to be:
(a)
A company incorporated under the Companies Act, 1956 or the
Companies Act, 2013; or
(b) A foreign company covered under the Companies Act, 2013;
or
(c) An office, branch or agency outside India, owned or
controlled by a person resident in India as provided under
the Foreign Exchange Management Act, 1999.
(ii) Marketplace e-commerce entity means an e-
commerce entity which provides an information technology
platform to facilitate transactions between buyers and
sellers.
(iii) Inventory e-commerce entity means an e- commerce
entity which owns the inventory of goods or services and sells
such goods or services directly to the consumers. It includes
single brand retailers and multi- channel single brand
retailers.
(iv) Platform means an online interface in the form of
any software including website and mobile applications.
(v) Seller means a person who, in the course of
business, imports, sells, distributes, prepares, packages,
labels, markets, repairs, maintains, or otherwise is involved
in placing such product for commercial purpose. A seller
includes any service provider and a manufacturer who is a
product seller.
Duties
of e-commerce entities
The
key duties of e-commerce entities are as follows:
- (i) The entity is required to appoint a nodal/ senior person
of contact who is resident in India for ensuring compliance with
the CPA 2019 and its the rules.
(ii) The entity is required to provide, in a clear and
accessible manner, information of its legal name, principal
geographic address of its headquarters and all branches, details
of its website, and contact details of customer care and the
grievance officer.
(iii) The entity must not adopt unfair trade practices in any
form.
(iv) The entity must establish an adequate grievance redressal
mechanism and appoint a grievance officer.
(v) The grievance officer must acknowledge the grievance within
48 (forty-eight) hours and ensure redressal of the complaint
within 1 (one) month from the date of receipt of the complaint.
(vi) The entity must not impose cancellation charges on
consumers cancelling after confirming purchase unless similar
charges are also borne by such entity, if they cancel the
purchase order unilaterally for any reason.
(vii) The entity must not manipulate the price of the goods or
services offered on its platform so as to gain unreasonable
profit by imposing any unjustified price on consumers.
Liabilities
of marketplace e-commerce entities
The
key duties of a marketplace e-commerce entity are as follows:
- (i) The entity must require sellers to issue an undertaking to
the effect that descriptions, images and other content
pertaining to goods or services on their platform are accurate
and correspond directly with the nature, quality purpose and
features of such goods or services.
(ii) In the terms and conditions governing the relationship with
sellers, the entity must include description of any
differentiated treatment which it gives or might give between
goods, services or sellers of the same category.
(iii) The entity must take reasonable efforts for maintenance of
record of all sellers of goods and services that have been
previously removed or access to which has been disabled under
Copyright Act, 1957, Trade Marks Act, 1999 or the Information
Technology Act, 2000.
(iv) The entity must provide the following information in a
clear and accessible manner on its platform:
(a) Details about the sellers such as name of business,
registered address, any ratings or feedback, country of origin
of the goods or services etc., to enable the customers to make
decision at the pre-purchase stage
(b) Information regarding refund, return, exchange, warranty,
and guarantee, delivery and shipment, modes of payment, and
grievance redressal mechanism.
(c) Information on available payment methods, the security of
those payment methods, any fees or charges payable by the
users and contact details of the payment service provider.
(d) Explanation of the main parameters for determining the
ranking of goods or sellers on the platform.
Duties
of sellers on marketplace
The
key duties of the sellers on an e-commerce marketplace are:
- (i) The seller must not adopt unfair trade practices in
offering the goods or services on the online platform.
(ii) The seller must not refuse to take back goods, withdraw or
discontinue the services purchased, or refuse to refund
consideration, if such goods or services are defective,
deficient, unlike the characteristics shown in the advertisement
or are delivered late, except in the cases of late delivery due
to force majeure.
(iii) The seller must have a prior written contract with the
respective e-commerce entity in order to undertake/ solicit
sales or offer on the e-commerce marketplace.
(iv) The seller must appoint a grievance officer for the
redressal of grievances of customers.
(v) The seller must ensure that advertisements of goods or
services are consistent with the actual characteristics and
usage conditions of such goods or services.
(vi) The seller must provide the total price of goods and
services, compulsory and voluntary charges, all mandatory
notices, expiry date, country of origin, details of importer,
guarantees, terms of exchange, returns, refunds and details
related to delivery and shipment on the online ecommerce
platform.
Duties
and liabilities of inventory e-commerce entity
The
key duties and liabilities on inventory e-commerce entity are as
follows:
- (i) The entity must provide accurate information regarding
refund, return, exchange, warranty, delivery, mode of payment,
types and security of available payment methods, fees and
charges, grievance redressal process and other similar important
information.
(ii) The entity must not engage in misrepresentation of the
quality of the goods or services or post false reviews about the
same by posing as a consumer.
(iii) The entity must not refuse to take back goods, withdraw or
discontinue the services purchased or refuse to refund
consideration, if such goods or services are defective,
deficient, unlike the characteristics shown in the advertisement
or are delivered late, except in the cases of late delivery due
to force majeure.
(iv) The entity must ensure that the advertisements of goods or
services are consistent with the actual characteristics, access
and usage conditions of such goods or services.
(v) In case an inventory e-commerce entity has vouched for the
authenticity of the goods or services sold by it (whether
explicitly or implicitly), it would bear the appropriate
liability in any action related to the authenticity of such
goods or services.
Contravention
of the E-commerce Rules
Violation
of the provisions of the E-commerce Rules shall be dealt with
under the provisions of CPA, 2019.
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