Government aims to tighten rules for e-commerce companies

Government plans to tighten rules governing e-commerce companies to ensure equal opportunities

The Center wants to introduce significant amendments to the Consumer Protection (E-Commerce) Rules 2020, where it plans to bring under control, flash sales that are often used by e-commerce sites to attract customers.

Apart from this, the government also wants to bring in data protection and strengthen the grievance redressal mechanism for the customers.

The move, for which the consumer affairs ministry has sought comments from various stakeholders within 15 days, i.e. July 6, 2021, is aimed at streamlining the functioning of e-commerce companies like Amazon and Flipkart.

Official sources said the proposed amendments are aimed at bringing transparency in e-commerce platforms and further strengthening the regulatory regime.

He said the government has received several complaints against widespread fraud and unfair trade practices in the e-commerce ecosystem.

The ministry clarified that there is no ban on traditional e-commerce flash sales, however only specific flash sales or back-to-back sales are not allowed which limit the choice of customers, increase prices and create a uniform blocks the opportunity.

The objective behind the amendment in the rules is to protect the interest of consumers and encourage free and fair competition in the market, the sources further added.

The draft rules, once approved, will be applicable to “all models of e-commerce, including marketplace and inventory models of e-commerce”.

Clause 16 of the draft rules states, “No e-commerce entity shall conduct flash sale of goods or services offered on its platform.”

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