heyN May 15, Secretary, Ministry of Consumer Affairs where did it go The government is planning to bring in new rules on e-commerce under the Consumer Protection Act, or CPA, 2019. These proposed rules would build on previous efforts to regulate the sector, such as e-commerce rules 2020 And this 2021 Draft Amendments to E-Commerce Rules, It would be easy to say trap them, however, as there are many obstacles along the way. These include lack of definite clarity on the scope of the regulations, imposition of fallback liability on e-commerce marketplaces and overlapping compliance regimes.
lack of definition Clarity
The CPA envisions a broad scope of e-commerce, which is defined to include “digital products”, which in turn remain undefined. Colloquially, digital products can include anything from video-on-demand to software as a service. While no domestic legal instrument defines digital products, India’s Comprehensive Economic Cooperation Agreement with Singapore uses the term broadly and includes computer programs and other digitally encoded products.
The proposed rules should remove unnecessary duplication of compliances and reflect the reality that e-commerce is a complex mix of digital and physical worlds. For example, online gaming is currently regulated by the Ministry of Electronics and Information Technology. If a user has a complaint regarding refund on deposits made in online games, he/she may approach the Grievances Appeal Committee, the Disputes Redressal Mechanism created under the Information Technology Rules 2021. Also, CPA allows users to approach District Consumer Redressal Commissions. Solve their problems.
White Tearace and FAir Aalgorithm
Governments around the world are also increasing regulatory scrutiny of business-to-business (B2B) arrangements and agreements in e-commerce, and India is no different. For example, the e-commerce rules 2020 require these marketplaces to disclose preferred relationships with their sellers.
Similarly, the government considered Rule last year to increase fairness and transparency in search and ranking algorithms for e-commerce. Telecom Engineering Center has also set draft standards On fairness assessment and rating of artificial intelligence systems, which could potentially be applied to e-commerce as well. But since e-commerce algorithms are based on a combination of factors, including consumer demand and differentiated B2B relationships, the mandate on fairness can have unintended consequences. For example, intellectual property (IP) laws, such as copyright and trade secrets, protect proprietary algorithms. Therefore, legal disputes are sure to ensue if the rules mandate IP disclosure to assess fairness. Thus, it is necessary to establish conceptual clarity on these issues before framing and introducing them within any rules for e-commerce.
Read also:
fall back Aleliability
The scope of e-commerce is not just digital; Complex physical supply chains underpin it. Therefore, linking the liabilities of each node in these chains is a work in progress in India. Imagine a user who wants to buy a laptop from an e-commerce marketplace. The marketplace website provides access to all sellers, and the user can choose from among them. In this scenario, the market does not have an inventory of the laptop; Instead, it is merely an intermediary for the user to get in touch with the sellers and facilitate the delivery of the product. Thus, if the product is defective, it is the seller who should be held accountable. Conversely, if the marketplace was selling the laptop directly, it would be liable for any defects.
the courts, has also affirmed this stand, and the marketplace has been deemed an intermediary under section 79 of the Information Technology Act. As a result, they are absolved of any liability that may arise if the product is defective.
Many e-commerce businesses have liberal policies on returning products and providing refunds to consumers. However, in India and throughout World, This veritable race to win customer loyalty can have an adverse effect on the profits of these companies. The return process often includes free pickup of products, as well as additional costs for their logistics and storage, which are borne by the company.
The government is planning to introduce a Provision To hold e-commerce businesses liable from 2021 onwards for their inability to provide goods and services to their sellers. It would also violate the legal immunity given to e-commerce marketplaces. Additionally, companies that are already having a hard time profitable Will be burdened with additional financial liabilities.
India’s digital ambitions are dependent on an enabling framework for e-commerce businesses which account for the bulk of investment and job creation. The new discussions provide an opportunity to clarify legacy issues in a way that will help spur innovation and protect consumers.
The author works at Koan Advisory Group, a technology policy consulting firm based in New Delhi. Thoughts are personal.
This article is part of ThePrint-Koan advisory series that analyzes emerging policies, laws and regulations in India’s technology sector. read all articles Here,
(Edited by Zoya Bhatti)