With Consumer Protection (eCommerce) Rules 2020 notified, all online service providers must now comply

July 30, 2020, New Delhi: Giving more power to the consumer, the Consumer Protection Act, 2019 came into effect from 20 July 2020, and with it, the Consumer Protection (ecommerce) Rules 2020 were also notified. As per the notification, these rules would now cover all goods and services bought or sold over digital or electronic networks, and would be applicable to all models of e-commerce, including marketplace and inventory models. These rules will also apply to ecommerce entities like AliExpress, which are not established in India, but offer goods or services to consumers in India.

The Consumer Protection Rules for ecommerce are a positive step from a consumer standpoint and most of the consumer asks via LocalCircles have been incorporated and this will significantly increase consumer trust in the ecommerce channel.

LocalCircles hosts online communities on consumer issues in association with the Department of Consumer Affairs and received a large number of complaints on various aspects of ecommerce over the last 3 years. These inputs from consumers helped LocalCircles and the Department of Consumer Affairs better understand the policy and enforcement gaps and these rules were crafted carefully to ensure consumers get the necessary redressal when purchasing products and services online. These services range from traditional marketplaces ecommerce and inventory ecommerce to online travel services and accommodation services and from e-pharmacies to OTT services. All of these products and service platforms are now required to comply with the ecommerce consumer protection rules.

Some of the issues faced by consumers on ecommerce services included no disclosure of convenience fee by travel/event ticketing apps, medicines on e-pharmacy apps not showing best before dates, consumers being told at expected delivery time that the restaurant which you ordered from is closed, buying content/video streaming apps but requirement to use the app to play the bought songs, last minute ride cancellations by drivers, home maintenance service workers committing theft, etc in addition to issues with returning counterfeit or fake products with ecommerce and social commerce sites.

Other ecommerce services where consumers had a lot of grievances included online recruitment, payment services, peer to peer marketplaces, accommodation services, app-taxi services and gaming services. Instances were shared of how frauds are routinely taking place on peer to peer marketplaces. Many consumers also highlighted that while ecommerce marketplaces comply with legal metrology rules and display MRP, best before date etc. for products, many manufacturers also have sites that are non-compliant. All these sectors have now been brought under the ecommerce rules.

Per consumer feedback, LocalCircles had made a submission to the Department of Consumer Affairs in Sep 2019 to consider including all the above services identified in the graphic above. It was requested that the rules for services should be such that they empower the consumer with key information about the service terms for the particular product/service, additional service provider or seller details and their liabilities before the consumer makes a transaction. In addition, they should also have a grievance redressal mechanism and the same should be displayed on the online site/app. Consumers are glad that the scope has been expanded to cover all products and services sold over digital or electronic network including digital products and hope that all digital platforms and their sellers will soon comply with them. Consumers can now approach the Department of Consumer Affairs with any complaints and once the Central Consumer Protection Authority (CCPA) comes into being in a few months, they will be the permanent body to be approached for any grievances. In addition to independent complaints, the CCPA per the Consumer Protection Act 2019 is empowered to take suo-moto complaints in cases where a class of consumers have been impacted with an unfair trade practice, product defect or services deficiency.

Over 63,000 posts and comments were received during the consumer consultation for ecommerce consumer protection rules, where the consumers detailed out various instances of issues they have faced while procuring services through ecommerce.