The rules state that e-commerce companies also cannot impose cancellation charges unless similar charges are also borne by the e-commerce entity.

Woman holding a maroon debit or credit card browsing an e-commerce website on a laptop
Money E-commerce Tuesday, July 21, 2020 - 16:07

Every e-commerce retailer will now have to appoint a grievance officer, who will have to acknowledge any consumer complaint within 48 hours of receiving it and resolve it within one month of receiving the complaint. E-commerce companies also cannot impose cancellation charges unless similar charges are also borne by the e-commerce entity. These rules have been notified under the new rules for e-commerce companies.

The new rules, titled the Consumer Protection (E-Commerce) Rules, 2020, are expected to be notified this week, and apply to all retailers whether they are registered in India or whether they offer services to Indian consumers. The new rules for electronic retailers include the mandatory display of 'country of origin' on their products. 

Union minister Ram Vilas Paswan said on Monday that the entities will face penal action for any non-compliance.

The rules include all models of e-commerce, including whether it pertains to buying or selling or whether it has a marketplace or inventory model. 

Marketplaces are platforms like Amazon, Flipkart, Myntra, etc that have lakhs of sellers selling through the platforms. E-commerce websites that themselves hold inventory for or own all the products sold on their website come under an inventory model. An example of that would be the websites of Lifestyle Stores, Shoppers Stop, Tata Cliq, etc or even websites such as Souled Store, Bewakoof, etc.

The Consumer Protection (Ecommerce) Rules, 2020 are part of the Consumer Protection Act, which came into effect on July 20. The e-commerce rules specifically, will be notified this week, Paswan said.

Grievance redressal

 Grievance redressal is a new aspect under the new rules, and all e-commerce entities have to establish a mechanism for grievance redressal and appoint a grievance officer. This person’s name, designation and contact details will have to be displayed.

All companies have to appoint a nodal person of contact who is an Indian resident to make sure that the provisions of the Act are complied with. 

E-commerce companies cannot impose cancellation charges unless similar charges are also borne by the e-commerce entity.

The rules say that every e-commerce entity shall explicitly record the consent of a consumer for the purchase of any good or service through an affirmative action. cannot be pre-ticked, as it sometimes happens today. “... no such entity shall record such consent automatically, including in the form of pre-ticked checkboxes,” it states. 

What marketplace e-commerce companies have to follow

 It happens often that the product on display and the product delivered vary. Now, platforms will have to ensure that sellers give an undertaking that ensures that descriptions, images, and other content about the item is accurate and “corresponds directly with the appearance, nature, quality, purpose and other general features of such good or service”

The marketplace e-commerce platform must also display details about the sellers including the name, their address, customer care number and other information. This also needs to be accessible to anyone who asks for it before making a purchase. 

A ticket number for complaints with which someone can track should also be prominently displayed.

E-commerce platforms must also display information including return, refund, exchange, warranty and guarantee, delivery and more, and information about payment including methods, fees, or charges payable

E-commerce companies cannot manipulate the price of the goods or services to gain “unreasonable profit” by imposing on consumers, the rules state.

With most e-commerce platforms being marketplaces where all the goods sold on the platform are not owned by the entity, the rules require such companies to explicitly or implicitly vouch for the authenticity of the goods or services sold by it. They will bear appropriate liability in any action related to the authenticity of such a good or service.

Rules for sellers

Sellers cannot post fake reviews, cannot refuse to take back goods, discontinue services that have already been bought or refuse to refund if the item bought is defective or spurious. Sellers will have to appoint a grievance officer as well. 

They have to provide all relevant details about what is offered for sale, including country of origin.

They also have to ensure that the advertisements for the marketing of goods or services are “consistent with the actual characteristics, access and usage conditions of such goods or services.

Consumer Affairs Minister Ram Vilas Paswan said that these rules are "mandatory in nature" and violation of these will attract penalties as decided by the consumer protection authority and consumer courts as provided under the Act.

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