Govt issues draft rule prohibiting deep discounting by e-comm firms

To prohibit e-commerce firms from offering deep discounts, the Consumer Affairs Ministry has issued a set of draft rules.

According to the Consumer Protection (e-commerce) Rules under Consumer Protection Act, an e-commerce entity will have to maintain a level playing field, and it can not directly or indirectly influence the price of the goods or services.

E-commerce entities are prohibited from adopting unfair methods or unfair or deceptive practice that may influence transactional decisions of consumers to products and services.

The draft rules also bar such entities from falsely representing themselves as consumers or post reviews about good and services.

Among several key guideline rules, e-commerce firms will have to comply with the provisions of Information Technology (Intermediaries guidelines) Rules, 2011 ensuring that personally identifiable information of customers is protected.

Besides, e-commerce firms have to display details of the sellers, including the identity of their business, legal name and contact details.

They will also have to publish the name and contact details of the Grievance Officer (GO) on its website. In the case of accepted refund requests by consumers for payments, e-comm entity has to be dispensed within two weeks.

These businesses have been given three months to comply with the proposed draft. Views and suggestions from stakeholders on the draft mentioned above will be open till December 02, 2019.

Earlier in August, the Department of Consumer Affairs had proposed similar draft guidelines for guiding principles for online businesses preventing fraud and unfair trade practices.

The development has come at a time when retailer traders body CAIT had announced two-month-long nationwide agitations after complaining of an alleged violation of FDI norms by e-comm firms including Amazon and Flipkart.

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