E-commerce regulator to hear your complaints

Bengaluru: The Consumer Protection Bill 2019, which was passed by Parliament on Tuesday, paves the way for a regulator that could haul up ecommerce companies such as Amazon and Walmart-owned Flipkart if they influence pricing, unfairly promote products or misrepresent the quality of goods and services sold on their platforms.

The regulator, which will be called Central Consumer Protection Authority (CCPA), will not only protect the rights of consumers purchasing goods and services both online and offline, but also have the power to initiate class action against companies including enforcing recalls, refunds and returns.

This is expected to fill an “institutional void” in India’s regulatory regime, according to the bill. While the role of the regulator will be broad-based, it will scrutinise the business practices of online companies in tandem with the proposed rules for protecting consumers who buy online, a draft of which the Ministry of Consumer Affairs released on Monday.

Flipkart and Amazon did not comment until press time. A Snapdeal spokesperson said the consumer protection bill “will enable a holistic approach to consumer rights. It will also provide a structured framework for guidance and compliance.”

“The role of the CCPA will be anywhere where the consumer is, so both offline and online. But yes, it could increase compliance among online businesses, which are perceived to have had a free run in terms of how they deal with their customers up until now,” said an analyst advising internet companies, who did not want to be named.

Experts said the Bill’s passage could put ecommerce marketplaces on a sticky wicket as they would be restricted from influencing pricing and forced to disclose seller details on their websites and apps, which they have not done so far despite it being a requirement under FDI rules for the sector.

The other major issue that could hurt ecommerce businesses is a clampdown on sale of counterfeits online. Industry insiders admit that fake products continue to drive a sizeable chunk of sales at online marketplaces despite their best efforts to weed it out from their platforms.

“A little downside to us (online marketplaces), but a lot more benefit to the consumer is still a positive for businesses and the country,” said a top official of an ecommerce firm. “There are ways to use technology to help weed out counterfeits and we will propose to the government the use of such innovative things.”
 
Community platform LocalCircles, which worked with the Ministry of Consumer Affairs to gather data on the demands of consumers from ecommerce companies, found that 90% of customers who took part in its surveys wanted speedy acknowledgement of complaints and a standard timeline within which their complaints would be closed.

“The top consumer concerns with ecommerce sites raised in our community have been counterfeit products, seller influenced reviews and ratings, and lack of information disclosure by the platforms,” said Sachin Taparia, founder of LocalCircles.

“These inputs have been used to form the ecommerce guidelines for consumer protection and, once addressed, will lead to increased consumer trust in e-ommerce and growth of the sector as a whole.