Consumers are important. So are online businesses

Only 11 months after the Government notified the Consumer Protection (E-Commerce) Rules, 2020, the Department of Consumer Affairs has come up with a set of sweeping amendments, ostensibly “to protect the interests of consumers… and encourage free and fair competition in the market”. Among them is a norm stipulating the appointment of a chief compliance officer, a nodal contact person for 24×7 coordination with law enforcement agencies, and another requiring e-commerce entities offering imported goods or services to ‘incorporate a filter mechanism to identify goods based on country of origin and suggest alternatives to ensure a fair opportunity to domestic goods’. A third mandates a fall-back liability on online marketplaces in the event of non-delivery of goods or services to the consumer. Registration has also been made mandatory for all e-commerce players; specific ‘flash sales’, including ‘back-to-back’ ones, are set to be banned; and all entities must provide information within 72 hours on any request made by an authorised government agency probing any breach of law including cybersecurity issues. The fact that the latest changes expressly seek to ensure that none of an e-commerce entity’s ‘related parties and associated enterprises is enlisted as a seller for sale to consumers directly’ could also impact several platforms that retail products supplied by vendors with arm’s length ties. The enforcement of many of these norms is bound to spur protracted legal fights. In trying to address shortcomings in its rules from last year, the Government appears to be harking back to an era of tight controls. Overregulation with scope for interpretative ambiguity risks retarding growth and job creation in the hitherto expanding e-commerce sector. Welfare of the consumers is imporant. So is the well-being of businesses is also crucial.

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