Proposed Amendments to Consumer Protection (E-commerce) Rules, 2020

India has planned to tighten rules for e-commerce marketplaces like Amazon and Flipkart and has proposed several amendments to Consumer Protection (E-commerce) Rules, 2020.

Background

This decision was taken following complaints from small businesses. They have accused e-commerce marketplace of misusing market dominance and deep discounting by online retailers. Amendments have been proposed at a time when large e-commerce marketplaces like Flipkart and Amazon India are being investigated by Competition Commission of India (CCI) for alleged abuse of market dominance.  CCI probe also focuses on deep-discounting practices that e-commerce marketplaces often come up with.

Proposed Rules

  • Amended rules propose to limit ‘flash sales’ of goods and services by e-commerce companies.
  • However, it does not ban Conventional e-commerce flash sales. Some specific flash sales or back-to-back sales that limit customers choice, increase prices & prevents a level playing field will not be allowed.
  • E-commerce firms will have to establish adequate redressal mechanisms and appoint a chief compliance officer.
  • Companies are also required to name a resident grievance officer who has to be a company employee and a citizen of India. He will serve as nodal point of contact for law enforcement agencies.

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