Industry bodies such as the Indo-American Chamber of Commerce (IACC) have raised concerns regarding the proposed amendments in the Consumer Protection E-commerce Rules 2020. In a letter written to the Consumer Affairs Ministry, the IACC has said that the proposed amendments will lead to multiplicity of regulations, increase compliance liabilities and can risk severely impairing the growth of the e-commerce sector.
Industry bodies such as CII, FICCI and Assocham, in a virtual meeting on Saturday, had sought more time to give their recommendations on the proposed amendments on the Consumer Protection E-Commerce Rules 2020. Sources said that the industry chambers will also be making written submissions in this regard to the Ministry.
According to sources, in a letter sent to the Ministry giving its feedback on the draft e-commerce rules, IACC has urged the Ministry to reconsider several provisions including those related to “fallback liabilities” and “flash sales”.
Stating that e-commerce firms are already registered with the Ministry of Corporate Affairs, the industry body believes that the proposed provision of mandatory registration by e-commerce firms with the Department of Promotion of Industry and Internal Trade (DPIIT) will lead to a dual registration process leading to additional burden for e-commerce firms.
“Lack of categorisation regarding what constitutes an e-commerce entity poses the same burden to a small retailer with an online presence to that of a very large platform. In its present form even logistics players …may be considered as e-commerce entities,” it said. Stating that the categorisation needs to be defined better, it added that instead of stringent definitions, light touch regulations is a better approach to take.
The Ministry has proposed to prohibit certain kinds of online flash sales. It also said that “ambiguous” definitions of flash sales may lead to inconsistent application of the rules “opening the door for discretionary action” and defeats the premise of a level playing field between online and offline retail. “If the intent of these provisions is to dispel allegedly predatory or discriminatory market activities, this is already covered in the Companies Act 2002,” the IACC pointed out in its letter sent late last week.
On the issue of fallback liabilities on e-commerce entities, the industry body said the liability should be placed on the seller considering that in a marketplace model, e-commerce entities do not hold any control over inventory.
IACC also said that any regulatory action should not stifle the growth of the e-commerce sector as it could not only hurt the interest of consumers but also of small sellers, retailers, logistics providers and other stakeholders reliant on the sector for the livelihood. The Hindu BusinessLine