India Proposes User Safeguard Rules for E-Commerce Platforms

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indian e-commerce site flipkart

(Bloomberg) — India is proposing a series of consumer safeguards that forbid e-commerce companies such as Amazon.com and Walmart-owned Flipkart Online Services Pvt. from influencing pricing, adopting unfair promotion methods or misrepresenting the quality of goods and services.

E-commerce companies must self-declare compliance and also provide a way for customers to contact them directly, said the proposed e-Commerce Guidelines for consumer protection 2019, published on the Department of Consumer Affairs website. The department invited parties to provide feedback by Sept 16.

Among the key guidelines are those that require platforms like Amazon and Flipkart to declare all details about their sellers including address, website, and email address. The platforms are also required to display terms of contract with the seller relating to return, refund, exchange, warranty, delivery and mode of payments.

Earlier this year, India tightened rules for e-commerce platforms after complaints from small shops and domestic sellers. Amazon and Flipkart are now banned from striking exclusive arrangements with sellers, offering deep discounts or holding any business interest in online merchants on their websites.

Groups representing small traders have continued to allege that large platforms prioritize and sell products of a favored few vendors with whom they have commercial linkages.

Comprehensive Rules

The proposed consumer safeguards could come in handy as the country works on a comprehensive set of rules for the world’s fastest growing e-commerce market. “The larger e-commerce policy is being drafted and is expected to take several months, so the government is taking immediate steps to enhance protection of consumer rights,” said Sachin Taparia, chief executive officer of LocalCircles India Pvt., a social community which helped gather inputs from consumers through polls and surveys.

After the formal consultation is completed by mid September, the government is likely to include the proposals in its Consumer Protection Act, Taparia said.

The draft guidelines seek to protect personally-identifiable information of customers and set a 14-day limit for payments toward refund requests. Counterfeit products cannot be listed on e-commerce websites or companies could be held liable.

The department of consumer affairs proposed that every e-commerce entity publish the name and contact details of its grievance officer, who would have to address complaints within one month from the date of receipt.

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