Draft guidelines released for ecommerce platforms on consumer protection

Draft guidelines released for ecommerce platforms on consumer protection
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5 Aug, 2019

The department of consumer affairs has released a model framework of guidelines for ecommerce entities on consumer protection.

Ecommerce platforms will now be required to appoint a grievance officer and will also face secondary liability in case of fake products sold on the site, according to the draft guidelines.

The websites will be required to publish names and contact details of the grievance officer along with mechanisms for registering a complaint. The grievance officer will have to redress complaints within a month.

The advisory is called the e-commerce guidelines for consumer protection 2019 and adds to the draft national ecommerce policy, which had mandated the formation of a Central Consumer Protection Authority (CCPA) to act as a nodal body for addressing consumer grievances against ecommerce platforms.  

For marketplaces

The ecommerce marketplaces are also required to display seller details, including the address and contact details, on the website, apart from displaying terms of the contract between the platform and sellers related to return as part of the proposed framework.

“The draft guidelines issued by the department will significantly contribute towards boosting consumers’ confidence, thereby facilitating the exponential growth that ecommerce platforms have exhibited in recent times,” said Kaushal Mahan, group business director at research and public policy consulting firm Chase India. 

“To ensure that the guidelines do not stifle innovation, the government should aim to work towards formulating specific guidelines for different operating models followed by ecommerce entities viz. marketplaces, inventory-based etc for convergence between these guidelines and the consumer empowerment aspect in the National e-commerce policy,” he added.

As part of the guidelines on consumer protection, ecommerce platforms will also be charged with secondary liability if they guarantee that goods sold on the marketplace by sellers are authentic.

Ecommerce platforms will also have to refund customers within 14 days for returns and will have to accept returns if goods are found to be defective, fake or not matching the features of the product advertised. 

For sellers

The guidelines make sellers liable to provide break-up of prices for goods or services, including compulsory charges like delivery, postage, taxes and handling or conveyance charges. It also requires sellers to state upfront the return policy, including who bears the cost of return shipping.

Stakeholders can respond with comments and suggestions on the guidelines by September 16, 2019.