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A law in the making to guard ecommerce consumers

The ministry of consumer affairs is looking to add a section detailing penalties for ecomm firms.

, ET Bureau|
Updated: Nov 19, 2019, 06.19 AM IST
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Online services like ticketing, cab-hailing, food ordering and home services will be included, while business-to-business ecommerce will stay out.
Ecommerce firms and their vendors could face penalties if they violate the proposed rules for protecting consumers on ecommerce platforms. The ministry of consumer affairs is looking to add a section detailing the penalties in the upcoming Consumer Protection (ecommerce) Rules, a senior government official told ET.

The ministry earlier extended the deadline for stakeholders and the public to submit feedback on the draft rules till December 2. The penalties will be guided by provisions in existing rules and Acts, like the packaged commodity rules, the Food Safety and Standards Act and the new Consumer Protection Act, 2019.

“This (section on penalties) is not given in the current draft rules which have been put up. This will cover issues of misleading advertisements, unfair treatment to consumers and several other things,” the official said.

The ministry is also expected to expand the definition of ecommerce in the draft rules.

Online services like ticketing, cab-hailing, food ordering and home services will be included, while business-to-business ecommerce will stay out. This is to ensure that internet firms like MakeMyTrip, Ola, Uber, Swiggy, Zomato and UrbanClap, fall under the ambit of the new rules.ET reported on September 30 that the ministry would broaden the scope of the rules to include online services.

“We are wording it in such a way that all services will get included in the definition of ecommerce,” the official said. “We will also clarify the models that do not fall under the ambit of these rules, like B2B ecommerce, as they have raised some concerns.”

To do this, the ministry is likely to spell out regulations for marketplaces and inventory-led models, which would apply to both products and services firms.

The rules will not only target large ecommerce marketplaces such as Flipkart and Amazon, but also single-brand entities like H&M, Xiaomi and fast moving consumer goods company Patanjali. Ola, Swiggy, Zomato and MakeMyTrip did not respond to ET's queries.

UrbanClap said it had not submitted any feedback to the ministry, while Uber said it would not comment.

“Many of the ecommerce services in India are currently not subject to any standards and rules, and that leads to limited information disclosure to consumers,” said Sachin Taparia, founder of LocalCircles.

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