The Indian government plans to introduce stricter rules for e-commerce platforms such as Flipkart and Amazon, among others. The government has proposed some tweaks to the e-commerce rules. The idea with these proposed rules is to curb widespread cheating and unfair trade practices in the e-commerce ecosystem.
The Department of Consumer Affairs has asked for comments or suggestions on the proposed amendments to Consumer Protection within 15 days, by July 6, 2021. Here are 10 takeaways from the newly proposed e-commerce rules/policy. Take a look.
No more flash sales..
-One of the biggest changes proposed by the Indian government is to stop flash sales on e-commerce platforms. Major e-commerce giants such as Flipkart, Amazon, among others host innumerable flash sales on phones and other goods to attract consumers/buyers. The Indian government aims to end that and want companies and e-commerce platforms to list products with enough stock.
The government believes that these flash sales are harming small businesses in general. The idea with the proposed e-commerce rules to treat all business, big or small, equally. The proposed rules also highlights that the government has received countless complaints from consumers, traders and associations against widespread cheating and unfair trade practices taking place in the e-commerce ecosystem. By putting an end to flash sales, the Ministry of Consumer Affairs aims to combat cheating and unfair trade practices.
The ministry noted in the draft e-commerce policy, “certain e-commerce entities are engaging in limiting consumer choice…wherein one seller selling on platform does not carry any inventory or order fulfillment capability but merely places a ‘flash or back-to-back’ order with another seller controlled by platform.” “This prevents a level playing field and ultimately limits customer choice and increases prices,” the ministry further stated.
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Conventional flash sales to continue!
-The ministry has clarified that the ‘conventional’ flash sales are not banned. Only ‘predatory’ ones will be banned. We expect the government to throw more light on these given the policy currently leaves a lot of grey area.
It is said, “conventional flash sales by third party sellers are not banned on e-commerce platform. But certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller on a platform does not carry any inventory or order fulfilment capability but merely places a ‘flash or back to back’ order with another seller controlled by platform. This prevents a level playing field and ultimately limits customer choice and increases prices.”
Currently, the proposed policy doesn’t clarify whether the big festive sales are not banned in the country. We expect the government to throw more light on the same in the days to come.
Other proposed e-commerce rules
– The proposed rules state that e-commerce companies will now need to mention the name and details of any importer from whom the product has purchased. The government has asked the platforms to provide a filter mechanism from where customers can figure out the origin of the products before making a purchase.
(Image: BGR India)
-The policy also stated that the e-commerce companies should provide alternative suggestions to customers/buyers for domestic goods before the purchase is made.
– The rules also forbids e-commerce platforms from displaying any misleading advertisements.
-The ministry alleged that the e-commerce platforms manipulate search result to promote certain sellers. The rules suggest a ban on misleading users by manipulating search results. With the new policy, the government aims to bring transparency in the e-commerce platforms curb what they call “unfair practices”.
-Just like the government ordered Facebook, WhatsApp, and other social media platforms to appoint nodal and compliance officers, it now wants e-commerce companies to appoint a chief compliance officer, a nodal officer, and resident grievance officers in India.
-The proposed e-commerce rules also prohibit e-commerce platforms from listing associated parties as sellers for selling to customers directly. The e-commerce platforms will be required to provide the best before or use before date to let consumers make an informed purchase decision.
No comments from Flipkart, Amazon or any other e-commerce platforms yet.
