Draft guidelines for e-commerce firms talk tough on deep discounting

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Jumping into the fray to act against deep discounting by e-commerce firms and regulate the sector, the consumer affairs ministry has brought out a draft of the proposed ‘Model Framework for Guidelines’ on e-commerce for consumer protection.

Just like the guidelines on foreign direct investment (FDI) in e-commerce, as well as some of the recommendations in the much delayed e-commerce policy, ‘level playing field’ is a common theme the Department of Consumer Affairs has also aired in its draft.

“An e-commerce entity shall not directly or indirectly influence the price of the goods or services and shall maintain a level playing field. They will also not adopt any trade practice which for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, or composite supply, adopts any unfair methods or unfair or deceptive practice that may influence transactional decisions of consumers in relation to products and services,” the draft guidelines said.

It further said that e-commerce firms cannot fabricate product and consumer reviews or exaggerate the quality. 

The ministry has also proposed that e-commerce companies, whose promoter or key management personnel have been convicted of a criminal offence punishable with imprisonment in the last five years, be barred from operating in India. 

The proposal is part of a surprise move by the Department of Consumer Affairs, which on Monday released a set of draft guidelines that e-commerce businesses should stick to. In a bid to protect consumer interests, the department has also mandated that e-commerce players redress customer complaints within one month, provide refunds within 14 days, and publish the names of grievance officers on their websites.

A senior consumer affairs department official, however, clarified that the consumer protection (e-commerce) guidelines are separate from other policy measures for the e-commerce sector that are currently awaited. These include the e-commerce policy being drawn up by the Department for Promotion of Industry and Internal Trade and the Data Protection Bill being prepared by the information technology ministry.

After dealing with the changes they had to make in their businesses after FDI in e-commerce rules were enforced and still awaiting the final e-commerce policy to be introduced, companies said they would look into the draft by the consumer affairs ministry.

“We are evaluating the draft guidelines on e-commerce released by the Department of Consumer Affairs and we look forward to participating in the deliberations to help finalise an operating framework. This will enable the sector to offer a high standard of consumer protection at every stage of an e-commerce transaction, in accordance with well-defined respective roles and responsibilities of sellers and platforms,” a Snapdeal spokesperson said.

Consumer-friendly measures


The Do's...
  • Redress customer complaints within one month, provide refunds within 14 days
  • Display terms of contract with seller regarding return, refund, exchange, warranty, etc for informed purchases by consumers
  • Advertise seller details and ensure advertisements for goods and services are consistent with the final offering

And Dont's...
  • Companies should not falsely represent themselves as consumers or post reviews about goods and services
  • Promoter or key management should not have been convicted of a criminal offence
  • Firms will be guilty of secondary liability if it makes an assurance vouching for authenticity of goods


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