Share data with Govt, ban on ‘specific’ flash gross sales: Move to tighten e-commerce norms

THE MINISTRY of Consumer Affairs, Food and Public Distribution has initiated sweeping adjustments to the Consumer Protection (E-Commerce) Rules, 2020, imposing new registration necessities for on-line retailers and a ban on “specific” flash gross sales — and mandating sharing of knowledge with Government companies.
The draft guidelines launched Monday are broadly in keeping with the IT middleman guidelines introduced for social media corporations earlier this 12 months. Representatives of native merchants and sellers described the proposed norms as a step to “purify” the e-commerce panorama of the nation.
According to the brand new provisions, e-commerce corporations would wish to register with the Department of Promotion for Industry and Internal Trade (DPIIT). They would additionally must share info with the “Government agency, which is lawfully authorised for investigative or protective or cyber security activities, for the purposes of verification of identity, or for the prevention, detection, investigation, or prosecution, of offences under any law for the time being in force, or for cyber security incidents”.
They suggest that the data sought by the Government company should be produced by the e-commerce firm “within 72 hours of the receipt of an order from the said authority”.
On the traces of IT middleman guidelines, the Consumer Affairs Ministry has proposed to mandate e-commerce corporations to nominate a grievance officer, a chief compliance officer, and a nodal contact individual “for 24×7 coordination with law enforcement agencies”.
In February, the Centre introduced out a algorithm mandating social media corporations to nominate officers and laying down necessities resembling offering traceability of content material originators. These middleman guidelines have been challenged within the Delhi High Court by messaging platform WhatsApp, which has mentioned that they’re violative of consumer privateness.

The Government had notified the Consumer Protection (E-commerce) Rules on July 23, 2020, for on-line retailers registered in India or overseas however providing items and providers to Indian shoppers. Any violation of those guidelines entice penal motion below the Consumer Protection Act, 2019.
While the unique guidelines targeted on elements resembling transparency about product info to assist shoppers make knowledgeable selections, the amendments goal to curb the circumventing of different legal guidelines. The Ministry has sought feedback and views from stakeholders on the proposed amendments by July 6.
The guidelines are relevant for all items and providers purchased or bought over digital or digital networks, together with digital merchandise. They are legitimate for all fashions of e-commerce, together with market and stock fashions, together with multi-channel single model retailers and single model retailers.
Furthermore, to make the prevailing e-commerce norms extra stringent, the Ministry is trying to make sure that these companies don’t use knowledge collected by means of their enterprise for “unfair advantage” and stop any doable hyperlinks they could have with merchants promoting items and providers on their platforms. On this entrance, the Government has referred to as for disallowing “specific flash sales” on e-commerce platforms.
Issuing a press release, the Consumer Affairs Ministry mentioned: “Conventional e-commerce flash sales are not banned. Only specific flash sales or back-to-back sales which limit customer choice, increase prices and prevents a level playing field are not allowed.”
A “flash sale” is outlined as a sale organised by an e-commerce entity at considerably diminished costs, excessive reductions or every other such promotions or engaging presents for a predetermined time frame.
Additionally, the proposed guidelines additionally look so as to add to the Centre’s push behind home items. They suggest that e-commerce companies ought to point out the title and particulars of any importer from whom it has bought such items or providers. These companies can even have to supply various recommendations to clients earlier than they make a purchase order “to ensure fair opportunity for domestic goods”.
The Confederation of All India Traders, a physique representing native merchants and sellers who’ve been opposing practices by main e-commerce companies like Amazon and Flipkart, mentioned in a press release: “The new draft is a guiding stone to purify the e-commerce landscape of the country, which has been greatly vitiated by various e-commerce global companies…”.

In December 2018, the Industry Department had revealed adjustments to its overseas direct funding coverage for e-commerce to tighten loopholes exploited by on-line marketplaces in earlier insurance policies introduced by the Centre. These included curbing marketplaces from exercising management over stock and limiting the connection between {the marketplace} and sellers on its platform.
In the proposed amendments to e-commerce norms, the Government is bolstering these elements by mandating that no logistics service supplier of a market e-commerce entity shall present differentiated therapy between sellers of the identical class.