IT for Change responded to the call from the Ministry of Consumer Affairs for public consultation on the proposed amendments to the Consumer Protection (E-commerce) Rules, 2020.
In light of the growing recognition of the dominance of certain platforms in the e-commerce domain, the Draft Rules are an important step in the right direction. They train their regulatory focus on the large ‘gatekeeper platforms’, recognizing the forms of business malpractices in the e-commerce domain that have thus far gone unregulated. The fact that certain platforms have been able to amass disproportionate market power, and the absence of a level playing field in the e-commerce domain is a consumer welfare concern at its core. We, therefore, welcome the Draft Rules, and make the following recommendations:
- A differentiated approach to the regulation of e-commerce entities should be adopted. The absence of such differentiation will result in smaller players bearing onerous compliance costs, reinforcing the dominance of large platforms.
- There is a need to clearly define the prohibition on flash sales [Rule 5(16)]. Explicit clarification regarding the regulatory intent behind such prohibition would help in delimiting the range of its application.
- A robust mechanism of cooperation between the Consumer Protection Authority and the Competition Commission of India needs to be established to prevent regulatory overlap about issues pertaining to anti-competitive conduct by e-commerce entities.
- To supplement the provisions which require e-commerce entities to furnish information regarding product rankings [Rules 5(7)(c) and 6(3)(f)], a provision requiring transparency of the ranking algorithms should be introduced.
- Rule 5(18) which allows for government access to any information held by an e-commerce entity should be deleted. Instead, right of data access should be given to consumers and sellers in relation to their individual data footprints on e-commerce platforms.