India's New E-Commerce Rules May Ban Flash Sales And Fraud To Protect Consumers

The government of India has proposed a bunch of amendments in the Consumer Protection (E-Commerce) Rules, 2021 which includes a ban on mis-selling and fraud flash sales on e-commerce websites, according to a TOI report.

Reuters

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The amendment proposal comes after several complaints from aggrieved consumers, traders and associations complaining about unfair trade practices that some e-commerce websites have been practising.

The consumer affairs ministry has asked for comments and suggestions on proposed amendments from the e-commerce platforms within 15 days by email. Apart from amendments from mis-selling and flash sales, the amendments include a ban on misleading users by manipulation of search results as well as appointment of a chief compliance officer and a resident grievance officer.

Moreover, registrations of e-commerce entities have been made mandatory with the Department for Promotion of Industry and Internal Trade (DPIIT) in a specified period for allotment of the registration number. Platforms that have been cross-selling would have to disclose this information to users in a prominent manner.

E-commerce companies have been asked to provide the necessary information within 72 hours of the receipt of the order from a government agency for prevention, detection, investigation and prosecution of offences under any law, according to proposed amendments.

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The new amendments are also looking to make flash sales a thing of the past stating that if such sales are organised fraudulently by altering the ordinary course of business through technological means with an intention to allow only a specific seller or group of sellers under an e-commerce platform to sell goods or services.

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The official release clarified, ¡°To protect the interests of consumers, prevent their exploitation and encourage free and fair competition in the market, the Government of India is sharing a draft of the proposed amendments to the Consumer Protection (E-commerce) Rules, 2020. The proposed amendments aim to bring transparency in the e-commerce platforms and further strengthen the regulatory regime to curb the prevalent unfair trade practices.¡±

Along with this, it has proposed a ban on displaying and promoting misleading advertisements. E-commerce entities offering imported goods and services will also have to list the country of origin.

Lastly, the amendments propose that the ranking of goods and services offered on the platform must make sure that the parameters for the same don¡¯t discriminate against domestic sellers and goods.