Indian Ministry Of Consumer Affairs to Pass New Law, e-commerce Websites to Be Affected

In order to protect small businesses from predatory behaviour by E-Commerce giants, Consumers Affairs Ministry has proposed a new set of laws.

In a move that seems to be for the benefit of all the small business owners and vendors alike, the Consumer Affairs Ministry of India seeks to end the “display or promotion of misleading advertisement whether in the course of business”.

The move, which was preceded by thousands of complaints by small businesses, asking the government to look into the shady business practices of E-Commerce giants such as Amazon and Flipkart.

These companies have long been accused of unfair trade practices to establish dominance in the marketplace and drive local vendors and sellers out by putting the prices too low. Another bone of contention seemed to be the various Flash sales of electronic devices that happened to cut the local vendors out.

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New directives from the government to E-Commerce companies

Companies like Flipkart and Amazon will fall under the new directives.

With this new directive by the Indian government, which is being called the Consumer Protection (E-Commerce) Rules, 2020, e-commerce giants including Amazon, Flipkart, and Myntra will have to follow a new set of directives.

  • Any company that is registered to trade in India “shall 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 Act or the rules made thereunder.”
  • Certain information about a platform will have to be made transparent to its users, including but not limited to Legal Name, address, and contact details.
  • E-commerce entities are also not allowed to mislead the customers with any false advertisement or adopt and unfair trade practices.
  • “Every e-commerce entity shall establish an adequate grievance redressal mechanism having regard to the number of grievances ordinarily received by such entity from India”, and “appoint a Chief Compliance Officer who shall be responsible for ensuring compliance with the Act and rules made thereunder and shall be liable”
  • E-commerce companies will also adhere to Indian National Consumer Helpline.
  • Companies will also not be able to levy any additional cancellation charges from the customers.
  • Price manipulation will also be outlawed.

The Ministry of Consumer Affairs is receiving comments and suggestions to this law until July 6. Anyone who wishes to do so can email the ministry at [email protected].

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