The Information Technology Act, 2000 was India’s first legislation on e-commerce, and it attempted to give effect to the United Nations Commission on International Trade Law’s Model Law on Electronic Commerce, which was adopted in 1996.
Transactions taking place via electronic methods of communication and what is now known as e-commerce was intended to be recognized by the law under the terms of the Act. It was capable of recognizing electronic records and digital signatures and determining the time and location for the transmission and receiving of electronic documents.
Different cybercrimes and other violations were covered under regulatory and penal frameworks established by the Act. It permitted the revision of associated legislation in order to bring them into conformity with an increasingly technologically advanced society.
Provisions made according to the E-Commerce Regulations
Among other things, the Rules have been drafted to achieve the objectives outlined in Section 94, read along with Section 101 of the CP Act, which includes preventing unfair trading practices in the b2c web design and e-commerce industry.
To ensure that all models and platforms of e-commerce fall under the purview of the Rules, the application of the Rules has been maintained as wide as possible, both inside India and internationally.
The following types of entities are defined generally in the Rules, and their responsibilities are prescribed in the following sections:
E-Commerce entity
This term refers to any individual who owns, operates, or manages an online platform for e-commerce but does not include sellers who participate in a marketplace driven by an E-Commerce business. Entities such as those listed below would be included under this broad definition.
Marketplace e-commerce entity
It refers to a business that provides a web-based platform to enable transactions between buyers and sellers. Companies like Amazon, Flipkart, and other such entities would come under the scope of this term. Sellers that operate on such platforms are not included in the definition of an e-commerce firm for tax purposes.
Inventory e-commerce entity
Brands that promote and sell things that they own on their online platform would be considered in the same category. While Marketplace E-Commerce companies provide a platform for sellers and buyers to interact, Inventory E-Commerce businesses are the actual vendors of the items transacted on their web-based marketplace.
What are the E-Commerce Rules, and how do they apply?
- All goods or services purchased or sold over digital or electronic networks, including digital products, are considered digital.
- All e-commerce platforms, including the marketplace and inventory models, are covered by this policy.
- Any forms of e-commerce retail, including multi-channel single-brand merchants and single-brand retailers operating in single or multiple formats;
- All sorts of unfair commercial practices across all e-commerce formats are prohibited.
Natural individuals who engage in systematic and habitual personal activities that are not like a professional or commercial business are exempt from applying the Rules of Conduct.
On the other hand, the Rules apply to foreign commercial enterprises that supply products or services to Indian customers regularly, such as companies such as Sephora or Walmart.
What are the responsibilities of e-commerce businesses?
- Create a system for the resolution of grievances for a multi-vendor eCommerce platform.
- A grievance officer must be designated, and the platform must include the grievance officer’s name, contact information, and position description. Any consumer complaint must be recognized by a consumer complaint officer within 48 hours of receipt, and it must be resolved within one month of the date of receipt.
- Specify the names and contact information for importers.
- Cancellation fees shall not be levied against any customers unless the exact costs are charged on the entities that cancel purchase orders on their initiative.
- By taking proactive action, you may capture express customer permission for purchase. No such consent shall be gained automatically, for example, by using pre-ticked checkboxes or other similar means.
- Accept customer refund claims by the standards set out by the Reserve Bank of India.
- Please refrain from manipulating the prices of products or services provided on its site. Among the elements taken into account will be current market conditions, the need of the item or service, any exceptional circumstances under which the commodity or service is given, and any other relevant aspect.
- Avoid making distinctions between customers who belong to the same class or arbitrarily categorizing them in a detrimental way to their rights and interests.
In what ways are marketplace e-commerce entities liable for their actions?
- Acquire an assurance from sellers on its platform that the descriptions, images, and other content about goods or services sold on the forum are accurate and correspond directly to the features (appearance, nature, quality, purpose, and so on) of the goods or services that were sold.
Users should be informed about the following:
- Customer information such as the company’s name and registration, geographic location, customer service number, rating or feedback, and any other information that helps consumers make educated pre-purchase selections are included in the first section of this section.
- Provide the vendor’s information upon written request by a consumer who has bought products or services via its platform to communicate with the seller and facilitate efficient dispute resolution.
- A ticket number that the consumer may use to follow the progress of their issue.
- In addition to the following terms: return/refund/exchange policies, warranty/guarantee policies, delivery and shipping policies, payment methods, and dispute resolution procedures,
- Information about the payment options that are offered as well as their security
Responsibilities of Marketplace E-Commerce businesses
- It is only after complying with the requirements of Section 79 of the Information Technology Act, 2000 (IT Act) and the Information Technology (Intermediary Guidelines) Rules, 2011 that an E-Commerce marketplace entity can claim immunity from liability for any content published by third parties and sellers on its platform.
- It will seek assurances from vendors who operate on its platform on the legitimacy of the descriptions and photographs of the items and services being offered for sale by such merchants.
- Make explicit provisions in the terms and conditions generally regulating its relationship with sellers operating on its platform for any differential treatment provided to products, services, or sellers belonging to a specific category.
- Tentatively maintain a record to facilitate identifying vendors whose products and services have been previously removed from the platform due to a violation of the Copyright Act of 1957, the Trade Marks Act of 1999, or the Information Technology Act of 2000.
In what ways are inventory E-Commerce entities responsible for and liable for their actions?
- The company’s platform is designed to provide accurate information about the company’s return policy and delivery and shipment methods, mandatory notices required by law, the total price of the goods or services offered, their breakdown, and a consumer grievance redress mechanism.
- To refrain from portraying oneself as a customer to publish reviews of products or services or misrepresent the quality of such items or services.
- To ensure that marketing ads are consistent with natural characteristics, access, or use circumstances.
- When products or services are faulty, deficient, or spurious, it is customary to accept them back rather than to withdraw a service that has been acquired or promised to be purchased or to repay payment.
- To be responsible for any action relating to the authenticity of products or services supplied if the authenticity of the goods or services has been vouched for or guaranteed by the business.
What are the responsibilities of sellers about e-commerce entities?
The seller is required to provide the following information: the name and details of its website, e-mail address, customer care contact details, GSTIN, and PAN numbers;
The total price of such goods or services, as well as their breakdown, mandatory notices and information required by applicable laws, the name and contact information for a grievance officer, information about the country of origin, information about the importer, accurate information about the terms of exchange, returns and refunds, delivery and shipment, and guarantees or warranties, are all included.
- To refrain from portraying oneself as a customer to publish reviews of products or services or misrepresent the quality of such items or services.
- To ensure that marketing ads are consistent with natural characteristics, access or use circumstances
- When products or services are faulty, deficient, or spurious, it is customary to accept them back rather than to withdraw a service that has been acquired or promised to be purchased or to repay payment.
- To refrain from engaging in unfair trade practices when offering products or services on the e-commerce entity’s platform or in any other manner.
- To enter into a formal agreement with the e-commerce firm via whose platform they desire to offer their products or services.
Conclusion
The addition of measures relevant to e-commerce to the existing consumer protection system would be a welcome addition. It would broaden the scope of the current regime to include new-age conflicts that commonly occur between consumers and e-commerce entities/sellers on online platforms.
In addition, the precise compliances needed by companies in the Software Development Company would promote openness in the e-commerce process and—prompt resolution of consumers’ complaints.
