More power to e-commerce customers: Bill to bring transparency, weed out fakes from online marketplaces

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Published: August 6, 2019 9:31:20 PM

The bill has called for the creation of Central Consumer Protection Authority of India to ensure that e-commerce companies don’t influence prices etc. The CCPA will also have powers to take suo moto action and file class-action suits if consumers are impacted by a faulty or fake product.

The e-commerce consumer protection guidelines also require the marketplace to disclose the agreement between them and the seller.

The government scrutiny on e-commerce marketplaces across sectors is set to get tighter as it aims to enhance the transparency between the marketplaces and sellers and strengthen consumer rights in online shopping with the Consumer Protection Bill, 2019. The bill passed in the Rajya Sabha on Tuesday will replace the Consumer Protection Act, 1986. The e-commerce ‘consumer protection; guidelines issued recently by the department of consumer affairs will soon “be a part of the Consumer Protection Bill. Once the rules are finalised and even if the e-commerce policy is not final, these rules can be enforced and fine-tuned later when the final e-commerce policy is released,” Sachin Taparia, Founder, LocalCircles — the social community platform told Financial Express Online.

The bill has “called for the creation of Central Consumer Protection Authority of India (CCPA) like TRAI to ensure that e-commerce companies don’t influence prices, build safeguards against counterfeit on their platform,” Taparia added even as LocaCircles hosted online consumer communities for department of consumer affairs and conducted preliminary consumer consultation for these guidelines. The bill would also seek details of the seller and their terms and conditions with them around returns, the penalty for counterfeit products, undertakings, etc.

The bill will cover all e-commerce entities selling products and services to consumers such as marketplaces, e-commerce inventory-based sellers, all service providers selling online services including food delivery, cab booking, travel, insurance, personnel services, peer-to-peer marketplaces for new and used goods, event ticketing services, medical services, online pharmacies, maintenance and household services, coupon services, hotel and accommodation services, content subscription services and any social commerce conducted via social networking platforms.

A Snapdeal spokesperson with respect to the guidelines issued had told Financial Express Online on Tuesday that “this will enable the sector to offer a high standard of consumer protection at every stage of an e-commerce transaction, in accordance with well-defined respective roles and responsibilities of sellers and platforms. We look forward to participating in the deliberations to help finalize an operating framework.” An Amazon India spokesperson had also said that the company is currently studying the guidelines issued by the department of consumer affairs while Flipkart didn’t have any comments on it.

The CCPA will also have powers to take suo moto action and file class-action suits if it is found that a group of consumers have been impacted by a faulty or fake product. The concept of class action lawsuits never existed in India but is quite common in countries like the USA. “For instance, if a consumer ordered a blood pressure monitor and the seller sent a fake product or defective product and if the consumer complains about this to CCPA then it can do a quick survey to figure out whether this has been done with other customers as well and can take suo moto action and file a class-action lawsuit. They can ask the e-commerce platform of the sales made through that seller in a certain period,” said Taparia.

The e-commerce consumer protection guidelines also require the marketplace to disclose the agreement between them and the seller. While the idea here is not to seek commercial details between platform and sellers but to ensure that the consumer has access to key parameters like fake product undertaking, return and refund terms, penalties/delisting clauses for selling fakes etc.

As the bill has been approved in parliament, the guidelines can “potentially be rolled out this year itself,” he added, following the consultation with industry stakeholders.

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