Centre mulls changes in draft e-commerce rules

What is the news?

The Centre is considering changes to the consumer protection rules on e-commerce that may include redrafting related party sales and clarity on flash sales, after consultation with industry and e-commerce players.

Why govt is considering changes?

Industry associations and companies voiced their concerns regarding various provisions of the draft rules. Hence, the final rules are expected to give clarity on issues such as what constitutes flash sales, finer details, and issues regarding the appointment of resident grievance officers, among others.

Background

In a bid to tighten regulatory norms further, the government had released draft e-commerce rules on 21st June 2021 for public consultation. Various industry associations and companies have sent their response to this draft policy. The final draft is expected after the Parliament session gets over later this week.

Concerns 

Industry players have expressed the following concerns:

1. Related-parties clause: They have urged the government to change the clause that says related parties cannot do any transaction in the marketplace.
2. Definition of e-commerce: They have also raised their concerns regarding the definition of e-commerce where the proposed rules state that anyone who helps in logistics or fulfillment, should also be considered an e-commerce player.
3. Inc in compliance burden: Implementation of the amendments in their current form will significantly increase the compliance burden on small businesses as well as for start-ups who are not even in the e-commerce business, but provide services to e-commerce

Suggestions

Industry associations and companies have suggested various changes:

• The definition of “inventory e-commerce entity” and “marketplace e-commerce entity” must be amended. It will clearly stipulate what is allowed and what is not for both modes of e-commerce.
• Proposed amendments exclude digital businesses that are already being governed by robust consumer protection norms and grievance redressal procedures, under parallel regulations.

Terms to know

• Draft E-commerce rules