The government is set to introduce the Consumer Protection Bill in the Parliament. If the bill proposed by Union Minister of Consumer Affairs, Food and Public Distribution Ram Vilas Paswan gets passed, ecommerce startups will face more legal bindings and a greater liability. The Consumer Protection bill aims to empower the interests of consumers and to establish authority to oversee timely execution and administration related to settlement of consumer issues.
The bill will hit the ecommerce platforms and retailers making fraudulent sales and ‘not upto the mark’ products. AIOVA (All India Online Vendors Association) has already raised fingers on Amazon India, alleging that the platform is being used for selling fake products. The association has further requested similar laws for sellers and vendors. In the past too, Alibaba and other Chinese ecommerce platforms have been involved in controversies around fake products sold on their portals. Alibaba was also accused of showing fake data to get an edge over its competitors.
The government should realise that ecommerce marketplaces provide services to both consumer and sellers. Why are you silent on sellers problems? https://t.co/yjJ7zyCx4g
— AIOVA (@AIOVA3) March 21, 2018
According to the current laws, ecommerce startups or firms in India are recognised as online marketplaces and facilitators of technology connecting buyers and sellers. According to the Consumer Protection Bill, these companies will have to register their platforms with the consumer affairs department and disclose all their business details and seller contracts.
According to media reports, the ecommerce companies would also be required to reveal what data are they recording and the intention behind it. The bill will also see if these platforms are sharing customer details with or without the user’s consent.
Most ecommerce platforms use Artificial Intelligence-enable companies to study consumer behaviour. They try to draw inferences or locate a pattern or improve the user experience, based on the consumer data. After the bill, ecommerce firms will have to reveal the flow of information and the companies they are sharing it with.
This is not the first bill by the Indian government to put ecommerce firms in the heat. Over the past year, the implementation of GST, TCS (tax collected at source) and corporate taxation have affected the ecommerce market in many ways.
According to a recent report by IBEF, the ecommerce market in India is predicted to hit the mark of $200 billion by 2026 from $38.5 billion in 2017. The value of the market is expected to cross the $50 billion mark by the end of this year. The penetration is certainly triggered by the growing number of smartphone users in India.