Consumer Protection (E-Commerce) Rules, 2020

On 23

rd July 2020, the Government has notified the Consumer Protection (E-Commerce) Rules, 2020. The rule basically aims to prevent the unfair trade practice in an E-commerce business, direct selling, and protect the interest and rights of the consumers. The current article briefly highlights the Consumer Protection (E-Commerce) Rules, 2020 (hereinbelow referred to as the Rules).

Applicability and non-applicability of the Rules

The Rules shall apply to the following-

All goods and services bought/ sold via an electronic or digital network,
All the e-commerce models (which also includes marketplace models and inventory models),
All e-commerce retails.
All the forms of unfair trade practices prevailing in the e-commerce models.
All the e-commerce entities not established in India but offering goods/ services to the consumers of India.

The Rules shall not apply to any activity of a natural person, which is being carried out in a personal capacity (i.e., the same is not part of a professional or commercial business).

List of dos’ and don’ts of an e-commerce entity

Rule 4 of the Consumer Protection (E-Commerce) Rules, 2020 defines the list of dos’ and don’ts of an e-commerce entity, which are tabulated hereunder-

Dos’	Don’ts
An e-commerce entity should be incorporated as a company under the appropriate law.	An e-commerce entity should not adopt any unfair trade practices.
An e-commerce entity should appoint a nodal contact person or a senior designated functionary. The appointed person should be an Indian resident and ensure compliance with the provisions of the Consumer Protection Act and the rules made thereunder.	An e-commerce entity should not impose cancellation charges on any consumer cancelling the purchase unless the charges are also borne by the entity.
An e-commerce entity should clearly display the following information on its platform- · Legal name, · Address of the headquarter and all its branches, · Name and address of the website, and · Contact details (i.e., e-mail ID, landline number, mobile number, fax, etc.) of the Customer Care and grievance officer.	An e-commerce entity should not discriminate between the consumers of the same class or make any arbitrary (random) classification of consumers affecting their rights.
An e-commerce entity should establish an adequate grievance redressal mechanism.	An e-commerce entity should not manipulate the price of the goods/ services to gain unreasonable profit by imposing an unjustified price on the consumers.
An e-commerce entity selling the imported goods/ services should mention the name and detail of the importer.	_

List of dos’ and don’ts of sellers on the marketplace

The dos’ and don’ts of the seller offering goods/ services via marketplace e-commerce entity are tabulated hereunder-

Dos’	Don’ts
The seller should have a prior written contract with the e-commerce entity.	The seller should not adopt any unfair trade practices.
The seller should appoint a grievance officer.	The seller should not falsely represent itself as a consumer and post reviews about the goods/ services. Further, the seller should not misrepresent the features or quality of the goods/ services.
The seller should provide the following information to the e-commerce entity to be displayed on its platform/ website- · Contractual information as required to be displayed by law. · The total price of goods/ services together with the breakup of the same. · Details of goods/ services offered for sale (including details of the country of origin). · Name, contact number, and details of grievance officer. · Details regarding terms of exchange, refund, and return policies, etc. · Details regarding the delivery and shipment of goods/ services. · Details regarding guarantees/ warranties, if any, applicable to the goods/ services.	If the goods/ services are not of the characteristics/ features as advertised or defective, the seller should not refuse to take back the goods or withdraw/ discontinue the service.

List of dos’ and don’ts of an inventory e-commerce entity

An inventory e-commerce entity is defined under rule 2(f) of the Consumer Protection (E-Commerce) Rules, 2020. It means an e-commerce entity that owns the inventory of goods/ services and sells such goods/ services directly to the consumers. The dos’ and don’ts of such inventory e-commerce entity is tabulated hereunder-

Dos’	Don’ts
An inventory e-commerce entity shall clearly provide the following information- · Contractual information to be displayed as per law. · Mandatory notices and information as per law. · The total price of goods/ services together with the breakup of the same. · Information regarding return policy, refund, warranty and guarantee, exchange, delivery, and shipment, available mode of payments, cost of return shipping, etc.	An inventory e-commerce entity should not falsely represent itself as a consumer and post reviews about the goods/ services. Further, the inventory e-commerce entity should not misrepresent the features or quality of the goods/ services.
An inventory e-commerce entity should ensure that the advertisement of goods/ services is based on actual characteristics, access and usage conditions of the goods/ services.	If the goods/ services are not of the characteristics/ features as advertised or defective, the inventory e-commerce entity should not refuse to take back the goods or withdraw/ discontinue the service.

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Frequently Asked Questions

Common questions about Consumer Protection E Commerce Rules 2020 Compliance Guide.

The Consumer Protection (E-Commerce) Rules, 2020 aim to prevent unfair trade practices in the e-commerce business and direct selling, and protect the interests and rights of consumers. These rules establish guidelines and regulations for e-commerce entities to ensure fair and transparent practices.

No, the E-Commerce Rules do not apply to any activity carried out by a natural person in a personal capacity, which is not part of a professional or commercial business. However, the rules apply to all goods and services bought or sold via an electronic or digital network, including various e-commerce models like marketplaces and inventory models.

An e-commerce entity must be incorporated as a company, appoint a nodal contact person or senior designated functionary who is an Indian resident, clearly display legal and contact information on its platform, and establish an adequate grievance redressal mechanism. It must also refrain from unfair trade practices and arbitrary discrimination between consumers.

Sellers on a marketplace e-commerce entity must provide information such as contractual details, total price with breakup, details of goods or services offered, name and contact of the grievance officer, policies regarding exchange, refund, return, delivery, and any applicable warranties or guarantees.

Inventory e-commerce entities, which own and sell goods or services directly to consumers, must provide detailed information about pricing, policies, warranties, and delivery. They must not falsely represent themselves as consumers or misrepresent the features or quality of their offerings. If goods or services are defective or not as advertised, they cannot refuse to take them back or discontinue the service.

The E-Commerce Rules explicitly prohibit e-commerce entities and sellers from adopting unfair trade practices. This includes practices like imposing cancellation charges on consumers, discriminating between consumers of the same class, manipulating prices to gain unreasonable profits, and misrepresenting the features or quality of goods or services.

Yes, the E-Commerce Rules apply to all e-commerce entities offering goods or services to consumers in India, even if they are not established in India. These foreign entities must comply with the rules and regulations set forth for Indian e-commerce businesses.

E-commerce entities must establish an adequate grievance redressal mechanism, and sellers on a marketplace must appoint a grievance officer. These measures aim to ensure that consumer complaints and grievances are addressed effectively and in a timely manner.

No, e-commerce entities cannot impose cancellation charges on any consumer cancelling the purchase, unless the charges are also borne by the entity itself. This rule prevents e-commerce entities from unfairly penalizing consumers for cancellations.

The E-Commerce Rules require e-commerce entities and sellers to clearly display the total price of goods or services, along with a breakup of the pricing components. They must also provide accurate and detailed information about the goods or services offered, including details like country of origin, features, and any applicable warranties or guarantees.