After receiving several complaints against widespread cheating and unfair trade practices being observed in the e-commerce ecosystem, the Ministry of Consumer Affairs has proposed an amendment in the Consumer Protection (e-commerce) Rule 2020 saying that e-commerce companies will not be allowed to organise flash sale of goods bringing under question a lot of sale festivals organised throughout the year by etailers such as Amazon and Flipkart.
A flash sale means a period during which products are sold on a highly discounted price. The ministry has sought views/comments by July 6 on the draft Consumer Protection (e-commerce) Rule 2020. “
Just like with social media giants, each e-commerce entity will also have to establish a grievance redressal mechanism by appointing chief compliance officer, nodal contact officer and resident grievance officer under the new amendments rule.
“Additionally, conventional flash sales by third party sellers are not banned on e-commerce platform. But, certain e-commerce entities are engaging in limiting consumer choice by indulging in “back to back” or “flash” sales wherein one seller selling on platform does not carry any inventory or order fulfilment capability but merely places a “flash or back to back” order with another seller controlled by platform. This prevents a level playing field and ultimately limits customer choice and increases prices,” officials said.
Coming heavily on the issue of the Country of Origin, the draft said that e-commerce companies will now mention the name and details of any importer from whom it has purchased such goods or services. They will also have to provide a filter mechanism on their websites from where customers can figure out the origin of the products quickly before making a purchase.
In a major push for domestic products, it has also suggested that the companies should provide alternative suggestions to customers before he/she makes a purchase to ensure fair opportunity for “domestic goods”.
The rules further forbid e-commerce companies from displaying any misleading advertisements.
The draft proposes that an e-commerce entity which is engaged in cross-selling of goods or services shall provide adequate disclosure to its users such as the name of the entity providing data for cross-selling and data of such entity used for cross-selling.
It further adds that no e-commerce entity shall indulge in mis-selling of goods or services offered on its platform. Every e-commerce entity shall ensure that sponsored listing of products and services are distinctly identified with clear and prominent disclosures.
Every e-commerce entity which intends to operate in India shall register itself with DPIIT within such period as prescribed by DPIIT for allotment of a registration number.