Within few days of coming into force of major provisions of the Consumer Protection Act, 2019, the Department of Consumer Affairs in the Ministry of Consumer Affairs, Food and Public Distribution has issued Consumer Protection (E-Commerce) Rules, 2020 which have come into force from July 23, 2020.
The Rules, in line with the draft National E-Commerce Policy released by the government in early 2019, while elaborating on their scope and applicability, also state the duties and liabilities of the e-commerce entities and even duties of the sellers offering their goods or services through a marketplace e-commerce entity.
The ‘e-commerce entity’ has been defined as meaning any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity. It may be noted that e-commerce has been defined in the Consumer Protection Act and means buying or selling of goods or services including digital products over digital or electronic network.
Scope
The new Rules for all models of e-commerce (including market place and inventory models) are applicable in respect of all goods and services bought or sold over digital or electronic network, but exclude activity carried out in a personal capacity which is not part of any professional or commercial activity undertaken on a regular or systematic basis.
Interestingly, the new set of rules will also apply to an e-commerce entity which is not established in India, but systematically offers goods or services to consumers in India. It may be noted that such e-commerce entity must, also like any other e-commerce entity, appoint a nodal person of contact or an alternate senior designated functionary who is resident in India, to ensure compliance with the provisions of the Consumer Protection Act, 2019 or the rules made thereunder.
Grievance redressal mechanism
Every e-commerce entity now must establish an adequate grievance redressal mechanism considering the number of grievances ordinarily received by them and appoint a grievance officer. The grievance officer will have to acknowledge the receipt of any consumer complaint within 48 hours and redresses the complaint within one month. It may be noted that even a seller offering his goods or services through a marketplace e-commerce entity will have to appoint a grievance officer for consumer grievance redressal.
Information to be displayed
As per the rules, every e-commerce entity must provide various details like its legal name, address and contact details of its customer care and grievance officer. Such details must also be displayed of all sellers in case of marketplace e-commerce entity. Further, in case of imported goods, the e-commerce entity has also to mention the name and details of the importer.
E-commerce entity must also provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, and grievance redressal mechanism, and any other similar information which may be required by consumers to make informed decisions. Similarly, information on available payment methods, the security of those payment methods, any fees or charges payable by users, the procedure to cancel regular payments under those methods, charge-back options, if any, and the contact information of the relevant payment service provider, must also be provided in a clear and accessible manner.
It may be noted that the rules also provide for elaborate list of information which is required to be provided by the seller (in marketplace model) to the e-commerce entity, in order to display same on the latter’s platform or website. The information to be provided is broadly same for both marketplace e-commerce entity and inventory e-commerce entity. Total price in single figure of any good or service along with the breakup price for the good or service, showing all the compulsory and voluntary charges, such as delivery charges, postage and handling charges, conveyance charges and the applicable tax, is required to be displayed both by the seller (in marketplace model) and by the inventory e-commerce entity.
Other relevant highlights
Cancellation charges: Interestingly, according to the Rules, the e-commerce entity will not impose cancellation charges on consumers cancelling after confirming the purchase, unless similar charges are also borne by the e-commerce entity if they cancel the purchase order unilaterally for any reason.
IPR violation: Every marketplace e-commerce entity will have to take reasonable efforts to maintain a record of relevant information allowing for the identification of all sellers who have repeatedly offered goods or services that have previously been removed or access to which has previously been disabled under the Copyright Act, 1957, the Trade Marks Act, 1999 or the Information Technology Act, 2000. The Rules also provide that the e-commerce entity can voluntarily also terminate the access of such seller to its platform.
No duty to take back goods or discontinue services if same are delivered late due to force majeure: The Rules provide that the seller or inventory e-commerce entity will not refuse to take back goods or discontinue services, or refuse to refund consideration, if such goods or services are defective, deficient or spurious, or not of the characteristics or features as advertised/agreed, or if same are delivered late from the stated delivery schedule. The provision will however not apply in case if the late delivery is due to force majeure.
Penalty for contravention of Rules: The provisions of the Consumer Protection Act, 2019 are applicable for any violation of the provisions of these rules.