E-comm firms to finalise penalties for violating consumer protection norms

The government is all set to come up with detailed penalties section for e-commerce companies and vendors violating proposed consumer protection rules. The section will reportedly cover issues of misleading advertisements, unfair treatment to consumers, and several other things.

The broad rules around penalty would be inclusive of existing rules and Acts, like the packaged commodity rules, the Food Safety and Standards Act and the new Consumer Protection Act, 2019, said an ET report.

The detail regarding this was not given in the current consumer draft rules by the ministry of consumer affairs. The ministry is also working to broaden the scope of the rules with detail clarity to include online services.

This will bring all B2C online services such as ticketing, ride-hailing, food ordering, home services and single-brand entities like H&M, Xiaomi and FMCG firm Patanjali, under the ambit of new rules, added the report.

Earlier, consumer protection draft released by the consumer affairs ministry on November 11 marked that e-comm firms will have to comply with the provisions of Information Technology (Intermediaries guidelines) Rules, 2011 ensuring that personally identifiable information of customers is protected.

These firms have to display details of the sellers, including the identity of their business, legal name and contact details, added the draft.

It also asked e-comm firms to publish the name and contact details of the Grievance Officer on its website. In the case of accepted refund requests by consumers for payments, e-comm entity has to be dispensed within two weeks.

Of late, there has been an upsurge in the number of complaints against online businesses. One in every five complaints filed on the helpline was against an e-commerce company, said the latest MCA data.

Most of these complaints were related to fake products, problems in exchange and delayed delivery. Flipkart, Reliance Jio and Amazon figured in as the top three companies to registers most of the complaints.

The development comes amidst nationwide protests by offline retailer traders bodies against online firms alleged violation of existing FDI norms.

Offline retailers have demanded an immediate release of a national e-commerce policy and independent inquiry into business models of e-comm firms in the country.