Exclusive | Consumer Affairs Ministry stands ground on draft ecommerce rules

Tough rules

The rules, brought out in June, state that ecommerce marketplaces are responsible for the quality of goods sold on their platforms, they need to have robust grievance redressal mechanisms and they must refrain from offering market-distorting deep discounts, among other things.

Despite being flagged multiple times over the past two years by the government, the rule on deep discounts had led to significant opposition by companies. The rules state that an ecommerce entity cannot “manipulate the price of the goods or services offered on its platform in such a manner as to gain unreasonable profit by imposing on consumers any unjustified price having regard to the prevailing market conditions.”

Ecommerce companies have argued that in the absence of clear guidelines on what constitutes manipulative practices, they could be vulnerable to prosecution even for offering mild discounts. This will also restrict the way the business operates now.

The other contentious point is holding ecommerce companies liable for discrepancies in goods sold on their platforms. Niti Aayog pointed out that if online marketplaces can’t control the inventory sold on their platforms, they should also not be held responsible for the quality of such products.

Standing its ground

The Piyush Goyal-led consumer affairs ministry appears to be downplaying the issue, claiming that the responses are only views generated through the normal consultation process.

“That is (the suggestions) exactly what stakeholder consultations are. A draft policy is taken out only to get feedback from people. We welcome all feedback. Because from that, we will be able to come up with a more robust policy,” Goyal said on September 22. However, ministry officials took a more critical stance.

“If even marketplaces can’t be held responsible, why will the average seller abide by the norms? Ecommerce entities have to ensure their sellers adhere to the consumer standards that are set. The government does not have the resources to individually investigate the huge number of complaints that currently emerge from sales by millions of sellers,” an official said.

Another official said the reported arguments from the finance and corporate affairs ministries did not feature in their official submissions on the draft rules.

“These were not part of the official process and came only after the stipulated time. Many of these arguments have not even come to us officially,” the official said.

While July 6 was initially set as the deadline for submission of views, comments and suggestions on the draft rules from the public and stakeholders, it was extended to August 5.

Meanwhile, the commerce and industry ministry’s draft ecommerce policy, a separate piece of legislation that is set to dictate the norms regarding data, foreign investment and operations in the sector, is yet to be finalised.

Discussions on the policy gained pace earlier this year, when a revised draft was put out in March.

“However, since then, talks have slowed down considerably. Stakeholder consultations are continuing but the government is now focused on first laying out the ecommerce rules by the consumer affairs ministry,” a senior official said.