Form of words:
New Delhi: The Modi government is revisiting the draft amendments to consumer protection (e-commerce) rules, which were made public in June.
A government official said the provisions that the Union Ministry of Consumer Affairs, Food and Public Distribution is contemplating to amend include provisions relating to liability for e-commerce portals, grievance redressal and registration of firms in the sector.
The official said that apart from the issues raised by e-commerce players, government think tank NITI Aayog has sent a memorandum to the consumer affairs department, stating that certain rules fall under the jurisdiction of other government departments and agencies.
“Serious concerns have been expressed by major industry players like Tata, Flipkart and Amazon over various new amendments in the rules. Several rounds of meetings have been held between various industry stakeholders and Minister Piyush Goyal as well as officials of commerce and consumer affairs ministries regarding various provisions of the draft e-commerce rules, which are now being re-examined. . A senior consumer affairs department official familiar with the matter said.
NS proposed amendment The e-commerce rules sought to ban flash sales, increase compliance requirements, and fix liability on the Platform for failure to deliver promised goods or services (“fallback liability”) of sellers registered with them Is. The stringent provisions were seen as a sign that the Modi government was planning to increase scrutiny on e-commerce platforms operating in India.
The Department of Consumer Affairs had set July 6 as the deadline for submission of views, comments and suggestions on the draft from the public and stakeholders, which was later extended to August 5.
The government official said,Most of the flagged provisions pertain to the fallback liability clause and related parties/entities that are part of the new rules”. “He said that these provisions would hinder the growth of their ongoing business model in the country, while also hurting the investment sentiment. There were also concerns that several provisions in the proposed rules are inconsistent with the current FDI policy of the Department for Promotion of Industry and Internal Trade (DPIIT), the official said.
However, the official said, “certain provisions like data usage will remain unchanged”.
Pointing to the concerns raised by NITI Aayog, the official said, “It has flagged in a memorandum to the department that several provisions in the new e-commerce rules relating to consumer protection such as grievance redressal and flash sales fall within the framework of the new e-commerce regulations.” The domains of various ministries such as commerce and IT, as well as the Competition Commission of India (competition regulator, a government body), among others.
Read also: Piyush Goyal slams e-commerce giants, vows social media-like rules for Amazon, Flipkart
‘Controversial rules’
Many e-commerce companies have criticized the fallback liability rule on the ground that e-commerce FDI rules have been framed by DPIIT. Do not allow foreign funded players Selling its own inventory or influencing the prices of goods sold by domestic platforms that may sell their own inventory.
Despite this, they say, the new rules will hold them liable for any discrepancy in the seller’s account.
The definition of an e-commerce entity and “related parties” is another sore point.
The draft rules change the definition of an e-commerce entity to include “any entity engaged for the purpose of fulfillment of orders placed on its platform by a user and any” as defined under section 2 (76) of the Companies Act. Related party’ has been included. , 2013″. NS Subsidiary companies For example, a company’s company would be considered a “related party” in this context.
This means that the packaging company associated with the e-commerce platform shall be deemed to be the e-commerce entity, and so will the subsidiaries of the platform.
As per the rules, e-commerce firms must ensure that none of the related parties and affiliated enterprises are listed as sellers for direct sale to consumers. They also say that related parties or affiliated enterprises should not do anything that the e-commerce entity itself cannot do.
industry players have argued That classifying them as ‘e-commerce entities’ would curtail their right to access the market through e-commerce.
Internet and Mobile Association of India (IAMAI), an industry body, said The draft e-commerce rules will significantly increase the compliance burden on MSMEs and start-ups who are not in e-commerce business but provide services to them.
It has also said that the amendment to the definition “goes further”. Definition … as provided under other delegated legislations such as the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.
They claim that the rules dilute the safeguards allowed under the IT Act and the FDI policy.
Meanwhile, the NITI Aayog has pointed out that regulating “flash sales” does not lead to consumer welfare, adding that reduction in prices promotes consumer interest. It has also suggested to the Department of Consumer Affairs that grievance redressal with regard to cyber security concerns and government investigations, be left to the CCI and the IT ministry.
The memo, accessed by ThePrint, also notes that the mandatory registration of an e-commerce entity with DPIIT – as mandated under the draft rules – would create an additional compliance burden on the sector, as compared to physical proved to be important during the pandemic. Outlet.
However, the draft rules have their supporters, including the Confederation of All India Traders (CAIT), which has criticized NITI Aayog’s stand.
In a statement issued on August 28, CAIT general secretary Praveen Khandelwal said, “It is extremely unfortunate that NITI Aayog since its inception has done nothing to support India’s 8 crore businessmen and now that the government is in a uniform Trying to level the playing field.In the retail sector, NITI Aayog is putting its nose in the middle and trying to derail the process.
(Edited by Sunanda Ranjan)
Read also: Open e-commerce – India’s giant slayer that could limit Amazon, Flipkart’s market dominance
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