After stirring the social media platforms by implementing IT Rules 2021, India is now tightening grip around e-commerce platforms with the new Consumer Protection 2021. In a bid to hold e-commerce platforms more accountable & bringing about new changes in the way e-commerce platforms function, the got announced the draft of the law.

Details

The draft of new Consumer Protection 2021 seeks to scrutinize flash sales, enhance consumer security & privacy, provide better grievance redressal system and more. The laws are quite similar to the Centre implemented new IT Rules 2021 for social media and digital content platforms, there are certain new provisions tailor made for e-commerce platforms.

The rules framed under the 2020 Consumer Protection Act will be mandated on “all models of e-commerce”. This includes e-commerce marketplace, and the “inventory models of e-commerce”. A significant update comes in the form of Centre outrightly banning e-commerce flash sale.


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“No specific flash sales”

In its 16th Clause, the Consumer Protection 2021 states that-

“No e-commerce entity shall organize a flash sale of goods or services offered on its platform.”

The draft also clarifies the definition of flash sale. As per the draft-

“’Flash sale’ means a sale organized by an e-commerce entity at significantly reduced prices, high discounts or any other such promotions or attractive offers for a predetermined period of time on selective goods and services or otherwise with an intent to draw large number of consumers provided such sales are organised by fraudulently intercepting the ordinary course of business using technological means with an intent to enable only a specified seller or group of sellers managed by such entity to sell goods or services on its platform.”


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More Transparency for Customers

According to reports, ‘conventional flash sales’ will not be banned. The hammer on flash sales is struck by the Centre after it received several complaints of cheating and trade malpractices that take place on e-commerce platforms. Meanwhile, transparency for the customers will be asked by the Centre from e-commerce platforms in the form of disclosures when it comes to cross-selling. Cross-selling means to offer consumers additional products and related accessories when they buy a product.


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Data Privacy & Protection

Further, the draft also seeks to give consumers better data privacy and protection. As per the new draft, e-commerce platforms will not be able to make “available any information pertaining to the consumer to any person other than the consumer without the express and affirmative consent of such consumer”.


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Similarity to IT Rules 2021

Much akin to the IT Rules 2021, the e-commerce platform will also need to appoint a chief compliance officer. The new draft pertaining to e-commerce also states that e-commerce sites will need to share cyber-security related issues and incidents with the relevant authorities.


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How will the new e-commerce draft change your shopping experience?

Given the fact that the govt is going to outlaw ‘specific flash sales’ where customer choice is limited and a level playing field is not created, both consumers and suppliers will have a level playing field. Further, ‘fall-back liability’ introduced by the Centre will help the platforms to be more liable in the case of failure of delivery of products.

Contrary to current scenario where after a complaint is raised by the customer against a certain product and the e-commerce platform directs the customer to the supplier, now the consumers will be getting the resolution of their grievance by the platforms.